District Metals Corp. (TSX-V: DMX) (FRA: DFPP) is pleased to announce that it has closed its previously announced brokered private placement financing pursuant to an agency agreement with Haywood Securities Inc. raising aggregate gross proceeds of $4,750,000. Under the terms of the Offering, the Company issued a total of 15,833,333 units at a price of $0.30 per Unit including the exercise by the Agent of an option granted by the Company to sell up to an addition $250,000 worth of Units.

Garrett Ainsworth, President & CEO of District, commented: “District Metals is now fully funded for the upcoming 5,000 m drill program at our high grade polymetallic Tomtebo Property located in the Bergslagen Mining District of south-central Sweden. Our financing was heavily oversubscribed, exemplifying the enthusiasm towards the discovery potential at our high priority Tomtebo targets. I would like to thank our existing shareholders who participated, as well as welcome many new shareholders, including several institutional investors.”

Each Unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant. Each Warrant will entitle the holder thereof to acquire one common share in the capital of the Company at $0.42 per Warrant Share for a period of 24 months from the Closing Date (as hereinafter defined), provided that if, at any time prior to the expiry date of the Warrants, the volume weighted average trading price of the common shares in the capital of the Company on the TSX Venture Exchange is equal to or greater than $0.70 for 10 consecutive trading days, the Company may, within 15 days of the occurrence of such event, deliver a notice to the holders of Warrants accelerating the expiry date of the Warrants to the date that is 30 days following the date of such notice. Any unexercised Warrants shall automatically expire at the end of the Accelerated Exercise Period.

The net proceeds from the Offering will be used for exploration at the Company’s Tomtebo project in Sweden, and for working capital and general corporate purposes.

In consideration for its services, the Agent received a cash commission of $255,000 and was issued 850,000 compensation options, with each such compensation option entitling the holder to purchase one Unit of the Company at a price of $0.30 per Unit for a period of 24 months from the date of issuance.

All securities issued and issuable pursuant to the Offering are subject to a statutory hold period and may not be traded until May 1, 2021 except as permitted by applicable securities legislation and the rules and policies of the TSX Venture Exchange.

Certain related parties of the Company participated in the Offering. The issuance of Units to related parties is considered to be a related party transaction within the meaning of TSX  Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. The Company has relied on the exemptions from the valuation and minority shareholder approval requirements of MI 61–101 (and Policy 5.9) as the fair market value of the Units issued to such persons does not exceed 25% of the Company’s market capitalization.

The securities issued pursuant to the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) or any applicable U.S. state securities laws, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Further to a shareholder rights agreement entered into between the Company and EMX Royalty Corp. in connection with the acquisition of the Tomtebo and Trollberget properties in June 2020, EMX has been issued 219,756 common shares in the capital of the Company, which completes EMX’s top-up right to maintain its proportionate shareholding in the Company for no additional consideration.

Additionally, pursuant to the previously announced services agreement between the Company, Vector Geological Solutions Inc. and Daniel MacNeil, as principal of the Consultant, in connection with the acquisition of the Tomtebo and Trollberget properties in June 2020, the Company has issued 33,610 common shares in the capital of the Company to the Consultant. The Consultant is at arm’s length to the Company.

The Company has also granted a total of 1,400,000 stock options to directors, officers, employees and consultants of the Company, in accordance with the provisions of its stock option plan. Each stock option is exercisable at $0.46 per common share (being the closing price of the Company’s common shares on December 29, 2020, the grant date). All stock options have a term of five years and vest on the grant date.

About District Metals Corp.

District Metals Corp. is led by industry professionals with a track record of success in the mining industry. The Company’s mandate is to seek out, explore, and develop prospective mineral properties through a disciplined science-based approach to create shareholder value and benefit other stakeholders.

The advanced exploration stage Tomtebo Property, located in the Bergslagen Mining District of south-central Sweden, is the Company’s main focus.  The Tomtebo Property comprises 5,144 ha, and is situated between the historic Falun Mine and Boliden’s Garpenberg Mine located 25 km to the northwest and southeast, respectively. Two historic polymetallic mines and numerous polymetallic showings are located on the Tomtebo Property along an approximate 17 km trend that exhibits similar geology, structure, alteration and VMS/SedEx style mineralization as other significant mines within the district. Mineralization that is open at depth and along strike at the historic mines on the Tomtebo Property has not been followed-up and modern systematic exploration has never been conducted on the Property.