FIREWEED ZINC LTD. (TSX-V: FWZ) (OTCQB: FWEDF) (FSE: 20F) is pleased to announce closing of the second and final tranche of the non-brokered private placement first announced March 17, 2022. The second tranche consisted of 2,885,715 Common Shares at a price of CAD$0.70 per share and 100,000 flow-through common shares at a price of CAD$0.99 per share for gross proceeds of $2,119,000. In total the financing comprised two tranches totaling 8,472,159 Common Shares at a price of CAD$0.70 per share and 7,300,000 Flow-Through Shares at a price of CAD$0.99 per share for total gross proceeds of CAD$13,157,511.
Fireweed CEO Brandon Macdonald stated, “We are grateful that in these turbulent times we have supportive shareholders that allow us to raise capital on shareholder-friendly terms. It is a testament to the quality of our Macmillan Pass Project and the capability of the Fireweed team that not only did support for this financing never waiver but also that we were able to significantly upsize. Now with nearly $20M in the bank we set ourselves to the task of executing our biggest ever drill program and demonstrating exactly how unmatched Macmillan Pass is among undeveloped zinc assets.”
The total Offering consisted of 8,472,159 Common Shares at a price of CAD$0.70 per share and 7,300,000 Flow-Through Shares at a price of CAD$0.99 per share for total gross proceeds of CAD$13,157,511. The second and final tranche consisted of 2,885,715 Common Shares at a price of CAD$0.70 per share and 100,000 flow-through common shares at a price of CAD$0.99 per share for gross proceeds of $2,119,000. Teck purchased 4,285,714 Common Shares of the Company and Ibaera Capital purchased 3,571,429 Common Shares. The Offering also includes a large individual US shareholder who invested $3.5 million to significantly increase his position.
The proceeds from the Offering will be used for exploration and development of the Company’s Macmillan Pass Project in Yukon, Canada, and for general working capital purposes. The gross proceeds from the issuance of all Flow-Through Shares will be used to incur Canadian Exploration Expenses and will qualify as “flow-through mining expenditures” under the Income Tax Act (Canada), which will be renounced to the purchasers of Flow-Through Shares with an effective date no later than December 31, 2022 in an aggregate amount no less than the proceeds raised from the issue of the Flow-Through Shares. The Company will pay finders fees in compliance with the policies of the TSX Venture Exchange and applicable securities legislation, to arm’s length finders in connection with subscriptions from subscribers introduced by them, totaling $108,840, and 153,000 warrants exercisable for 12 months from the date of issuance to acquire common shares of the Company at an exercise price of $0.70 per share.
Insiders of the Company acquired an aggregate of 115,000 Common Shares in the Offering, which participation constituted a “related party transaction” as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Such participation is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities acquired by the insiders, nor the consideration for the securities paid by such insiders, exceed 25% of the Company’s market capitalization. As required by MI 61-101, the Company advises that it expects to file a material change report relating to the Offering less than 21 days from completion of the Offering, as the nature of the related party transaction is relatively immaterial, and was not necessary to complete the Offering, and can generally be considered reasonable in the circumstances.
This Offering remains subject to final approval of the TSX Venture Exchange. All securities issued under the Offering will be subject to a statutory hold period of four months plus a day following the date of closing.
About Fireweed Zinc Ltd.
Fireweed Zinc is a public mineral exploration company focused on zinc-lead-silver and managed by a veteran team of mining industry professionals. The Company has two projects located in northern Canada:
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