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Geomega Announces First Closing of Financing

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Geomega Resources Inc. (TSX-V: GMA) announces the first closing of a non-brokered private placement offering in the amount of $914,255, consisting of a total of 6,530,393 units at a price of $0.14 per Unit. The Offering of Units consists of one common share and one-half of one share purchase warrant. Each Warrant entitles the holder thereof to acquire one additional common share at a price of $0.20 per share for a period of twenty-four months from the closing date. The Corporation is expected to close a final tranche of the Offering later in July 2019, subject to receipt of regulatory approvals, including the approval of the TSX Venture Exchange. The securities to be issued under the Offering will have a hold period of four months and one day from their issue. The majority of the financing has been secured with a European supply partner but due to a confidentiality agreement and the strategic nature of the first rare earths recycling demonstration plant in Canada, the investor has requested to remain anonymous.


“Geomega would like to welcome our newest strategic partner as a shareholder in the Corporation. Our objective is very simple, it is to provide Europe and North America with a clean and sustainable supply of rare earths, ultimately eliminating the dependence on China. Our demonstration rare earth processing and recycling plant opens the door to production in Canada, which we believe will translate to future mining and downstream development. This is the first step in securing the required funding, a total of $2M, for the construction of the demonstration plant. Discussions for the remaining funds are still ongoing with various levels of the government and institutional groups and an update will be provided as soon as it is available,” commented Kiril Mugerman, President and CEO of Geomega.


The Corporation will use the proceeds of the Offering for construction of the demonstration plant, working capital and operating expenses.


Certain members of the board and executive management of the Corporation, being Kosta Kostic, Mario Spino, Jean Demers, directors of the Corporation, Kiril Mugerman, the President and Chief Executive Officer, and Alain Cayer, the Vice President of Exploration, have participated in this first closing of the Offering in the aggregate amount of $58,030. The Insiders’ Participation is considered a “related party transaction” under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (Québec) and the corresponding Policy 5.9 of the TSXV; however, the Insiders’ Participation is exempt from the formal valuation and minority shareholder approval requirements provided under Regulation 61-101 in accordance with sections 5.5(a) and 5.7(1)(a) of said Regulation 61-101. The exemption is based on the fact that neither the market value of the Insiders’ Participation nor the consideration paid therefor exceeds 25% of the Corporation’s market capitalization. The Corporation did not file a material change report at least 21 days prior to the first closing of the Offering since the Insiders’ Participation was not determined at that moment and the Corporation wished to close the Offering on an expedited basis for sound business reasons.


In other news, on June 14, 2019, the Corporation entered into a private exempt transaction to sell 1,000,000 of its shares of Kintavar Exploration Inc., at a price of $0.16 per share, for proceeds to the Corporation of $160,000. The transaction was effected pursuant to available prospectus exemptions and constitutes a one-time disposition of shares of Kintavar.  The Corporation has no intentions of proceeding with any further dispositions of its holdings in Kintavar at this time.


In connection with this Private Placement, the Company has paid a cash finder’s fee in an amount of $2,240 and issued 16,000 non-transferable finder’s options to acquire such number of common shares at a price of $0.20, exercisable for a period of twenty-four months and subject to a hold period of four months plus one day from the closing date.


About Geomega

Based in Montreal, Canada, Geomega Resources has developed a proprietary, environmentally friendly “ISR Technology” that recycles rare earth elements with focus on the permanent magnet industry and produces four high demand, high price, rare earth elements (HHREE – specifically Nd, Pr, Tb, Dy).


The company is targeting 2020 for initial production from its first commercial scale plant to supply HHREE’s to North America and other parts of the world.


Geomega also owns the Montviel rare earth carbonatite deposit and holds over 16.8M shares, representing approximately 20% of the issued and outstanding shares of Kintavar Exploration Inc. (KTR.V), a mineral exploration company that is advancing the Mitchi stratiform copper project in Quebec.


Posted July 3, 2019

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