SIGMA Lithium Resources Corporation (TSX-V: SGMA) (OTC-QB: SGMLF) is pleased to announce that it has closed its previously announced upsized non-brokered private placement of common shares and has issued 9,545,455 common shares at a price of C$4.40 per share (which is 10% above the initial indicated price) for gross proceeds of C$42.0 million.
The Offering book was oversubscribed and comprised primarily of the current shareholders of the Company: global ESG-oriented institutional investors focused on the theme of battery materials & energy transition. The planned use of proceeds of the Offering is as set forth in the Company’s news release dated February 2, 2021 titled “Sigma Lithium Announces a C$30 Million Private Placement of Common Shares at C$4.00”, including the preparation of a definitive feasibility study and permitting for Phase 2 of the development of the Grota do Cirilo lithium project (the “Project”), further exploration drilling for Phase 3 of the Project and general corporate purposes. The additional proceeds from the previously announced increase in Offering size are to be used to further enhance Sigma’s financial flexibility during the construction of Phase 1 of the Project.
Cormark Securities Inc. and National Bank Financial Inc. acted as financial advisors to the Company in connection with the Offering and received finder’s compensation in respect of certain orders from subscribers introduced by finders. This compensation was comprised of (i) cash fees of up to 6% of the proceeds and (ii) such number of warrants as is equal to up to 6% of the common shares purchased by such introduced subscribers (each such warrant entitling the finder to acquire one common share at an exercise price of C$4.40 per share and exercisable for one year after the closing of the Offering). Other parties also received finder’s compensation in connection with the Offering.
In connection with the Offering, the Company entered into an agreement with the A10 Group to provide services in respect of the Offering and A10 Group received finder’s compensation for purchases by subscribers it introduced, as described above. The arrangements with the A10 Group were considered and unanimously approved by each of the directors of the Company unrelated to the A10 Group.
All securities issued in connection with the Offering are subject to a statutory hold period in Canada expiring four months and one day from the closing of the Offering.
Certain principals of the A10 Group are directors, officers or indirect significant shareholders of the Company, such that the arrangement with the A10 Group in respect of the Offering is a related party transaction for purposes of Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions and Policy 5.9 of the TSXV (which incorporates such Multilateral Instrument by reference). The arrangement is exempt from the formal valuation and minority shareholder approval requirements of such Multilateral Instrument and TSXV Policy because the value of the transaction and the compensation are below 25% of the Company’s market capitalization.
The completion Offering remains subject to the final approval of the TSX Venture Exchange.
The common shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “1933 Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1993 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 nor shall there be any sale of the common shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.
ABOUT SIGMA LITHIUM
Sigma is a Canadian company that has been producing environmentally sustainable battery-grade lithium concentrate on a pilot scale since 2018 and shipping high-purity “green & sustainable” 6% Li2O battery-grade lithium concentrate samples to some of the leading global cathode and battery producers of electric vehicles. The Company is in pre-construction (including the EPC and “contract-readiness” of core construction suppliers) of a larger-scale lithium concentration commercial production plant in Phase 1 of the development of its Grota do Cirilo property. Based on the technical report titled “Grota do Cirilo Lithium Project, Araçuaí and Itinga Regions, Minas Gerais, Brazil, National Instrument 43-101 Technical Report on Feasibility Study Final Report” with an effective date of September 16, 2019, it will contemplate a capacity to produce at the rate of 220,000 tonnes annually of battery-grade “green” lithium concentrate and Sigma will be amongst the lowest-cost producers of lithium concentrate globally. The Feasibility Study Report is being updated to include the development of the Project’s second deposit, contemplating production at the rate of 440,000 tonnes per annum (Phase 2 of the Project).
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