Sun Metals Corp. (TSX-V: SUNM) announces the successful closing of the second and final tranche of its bought deal financing initially announced on October 7, 2019 and later on October 9, 2019 with respect to an upsize.  The closing of the final tranche of the Offering was led by Sprott Capital Partners LP, on behalf of a syndicate of underwriters including Cormark Securities Inc., Haywood Securities Inc. and PI Financial Corp.

Pursuant to the closing of the final tranche of the Offering, the Company issued a total of 4,520,000 common shares of the Company issued on a flow-through basis at a price of $0.25 per FT Share and 8,100,000 common shares of the Company issued on a flow-through basis at a price of $0.315 per Premium FT Share for aggregate gross final tranche proceeds of $3,681,500.  The Company has agreed to pay the Underwriters a cash commission of $214,015 in connection with the closing of the final tranche of the Offering.

Aggregate gross proceeds from the Offering total $6,151,500 from the issuance of 22,500,000 common shares.

Steve Robertson, President and CEO of Sun Metals stated, “We are pleased to close this equity financing which will provide Sun Metals with the opportunity to continue the successful exploration momentum at our Stardust project. In 2019, the summer exploration program revealed that the 421 zone extends both to the north and south of the original discovery hole. This funding will allow us the opportunity to advance the 421 zone even further as we continue to achieve exploration milestones along the way.”

An amount equal to the gross proceeds from the issuance of the FT Shares and the Premium FT Shares will be used for Canadian exploration expenses that will qualify as “flow-through mining expenditures”, as defined in subsection 127(9) of the Income Tax Act (Canada) and as “BC flow-through mining expenditures”, as defined in the Income Tax Act (B.C.), which will be renounced with an effective date no later than December 31, 2019 to the initial purchasers of the FT Shares and the Premium FT Shares in an aggregate amount not less than the aggregate gross proceeds raised from the issue of the FT Shares and the Premium FT Shares, and, if the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will indemnify each initial purchaser for any additional taxes payable by such subscriber as a result of the Company’s failure to renounce the Qualifying Expenditures as agreed.

The FT Shares and the Premium FT Shares to be issued in connection with the closing of the final tranche of the Offering will be subject to a hold period of four months and one day from the date of issue in accordance with applicable Canadian securities laws.

Certain directors and senior officers of the Company participated in the final tranche of the Offering and acquired an aggregate of 310,000 FT Shares for $77,500.  The participation of directors and senior officers constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101.  The Company has determined that the transaction is exempt from the formal valuation and minority shareholder approval requirements under MI 61-101 by virtue of the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of securities issued to directors and senior officers nor the consideration paid by directors and senior officers exceed 25% of the Company’s market capitalization.  The Company did not file a material change report in respect of the transaction 21 days in advance of the closing of the final tranche of the Offering because director and senior officer participation had not been confirmed.  The shorter period was necessary in order to permit the Company to close the final tranche of the Offering in a timeframe consistent with usual market practice for transactions of this nature.