O3 Mining Inc. (TSX-V: OIII)  is pleased to announce that it has closed its previously-announced “bought deal” brokered private placement of (i) an aggregate of 4,651,200 flow-through units of the Company at a price of C$4.30 per FT Unit for aggregate gross proceeds of approximately C$20 million, and (ii) an aggregate 8,599,810 units of the Company at a price of C$2.35 per Unit for aggregate gross proceeds of approximately C$20.2 million, including the exercise in full of the underwriters’ option and additional subscribers on the Company’s President’s List. The gross proceeds of the Offering are approximately C$40.2 million.

Each FT Unit under the Offering consists of one common share and one-half of one common share purchase warrant  of the Company, which will qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Income Tax Act (Canada) and section 359.1 of the Taxation Act (Québec)). Each Unit consists of one common share of the Company and one-half of one Warrant. Each Warrant will entitle the holder thereof to purchase one common share of the Company at an exercise price of C$3.25 for a period of 24 months following the closing of the Offering.

The Warrants shall be callable by the Company should the daily volume-weighted average trading price of the common shares of the Company on the TSX Venture Exchange exceed C$3.85 for a period of ten consecutive trading days, at any time during the period (i) beginning on the date that is four months and one day from the closing date of the Offering, and (ii) ending on the date the Warrants expire. Following a Call Trigger, the Company may give notice in writing to the holders of Warrants that any Warrant that remains unexercised by the holder thereof shall expire thirty days following the date on which the Call Notice is given.

The gross proceeds from the sale of the FT Units will be used by the Company to incur eligible “Canadian exploration expenses” that qualify as “flow-through mining expenditures” as both terms are defined in the Income Tax Act (Canada) related to the Company’s projects in Québec. The Qualifying Expenditures will be renounced in favour of the subscribers of the FT Units with an effective date no later than December 31, 2020, and in the aggregate amount not less than the total amount of the gross proceeds raised from the issuance of the FT Units. The net proceeds from the sale of the Units will be used by the Company for working capital and general corporate purposes.

The Offering was led by Cormark Securities Inc., Sprott Capital Partners LP, and Canaccord Genuity Corp., as co-lead underwriters and joint bookrunners, on behalf of a syndicate of underwriters. In consideration for their services, the Company paid the Underwriters a cash commission equal to 5.0% of the gross proceeds of the Offering, excluding certain President’s List subscribers.

All securities issued under the Offering will be subject to a hold period expiring four months and one day from the date of issuance. The Offering is subject to final acceptance of the TSX Venture Exchange. The securities 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 state securities laws and may not be offered or sold within the United States or to or for the account or benefit of a U.S. person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The following “insiders” of the Company have subscribed for Units under the Offering:

Note:   (1) Includes holdings of Mercedes Vizquerra.

Each subscription by an “insider” is considered to be a “related party transaction” for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company did not file a material change report more than 21 days before the expected closing date of the Offering as the details of the Offering and the participation therein by each “related party” of the Company were not settled until shortly prior to the closing of the Offering, and the Company wished to close the Offering on an expedited basis for sound business reasons. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on section 5.5(a) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25% of the Company’s market capitalization. Additionally, the Company is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(b) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25% of the Company’s market capitalization.

About O3 Mining Inc.

O3 Mining, which forms part of the Osisko group of companies, is a mine development and emerging consolidator of exploration properties in prospective gold camps in Canada – focused on projects in Québec and Ontario – with a goal of becoming a multi-million ounce, high-growth company.

O3 Mining is well-capitalized and holds a 100% interest in a number of properties in Québec (435,000 hectares) and Ontario (25,000 hectares). O3 Mining controls 61,000 hectares in Val D’Or and over 50 kilometres of strike length of the Cadillac-Larder Lake Fault. O3 Mining also has a portfolio of assets in the James Bay and Chibougamau regions of Québec.