Lion One Metals Announces $2 Million Sidecar Private Placement
LLO (LLO) Share Update July 2024 Wednesday 24th
Lion One Metals Announces $2 Million Private Placement Amid Market Demand
Lion One Metals Limited (TSXV: LIO) (ASX: LLO) (OTCQB: LOMLF) has announced a $2 million non-brokered private placement in response to market demand, aiming to bolster its working capital and general corporate purposes.
Instant Summary:
- Lion One Metals arranges a $2 million private placement.
- Each unit priced at $0.37, includes one common share and one warrant.
- Warrants exercisable at $0.50 per share, expiring in 36 months.
- Concurrent completion expected with previously announced $10 million LIFE Offering.
- Total expected gross proceeds of $11,999,999.80 from both offerings.
- Certain subscribers include company directors and management.
- Proceeds to be used for working capital and general corporate purposes.
Overview of the Private Placement
Lion One Metals Limited has announced a non-brokered private placement of up to 5,405,405 units at a price of $0.37 per unit, aiming to raise $2 million in gross proceeds. Each unit consists of one common share and one common share purchase warrant. Each warrant is exercisable at a price of $0.50 per share and will expire 36 months from the date of issue.
This Sidecar Private Placement mirrors the terms of the previously announced $10 million private placement led by Eight Capital as the lead agent. However, unlike the LIFE Offering, the Sidecar Private Placement will be settled directly with the company and not through the agent. The company may also pay a finder's fee in accordance with the policies of the TSX Venture Exchange (TSX-V).
Purpose and Use of Proceeds
The net proceeds from the Sidecar Private Placement will be used for working capital and general corporate purposes. All securities issued under this placement will be subject to a four-month hold period as per Canadian securities laws.
The Sidecar Private Placement is expected to be completed concurrently with the LIFE Offering. In total, the company expects to issue 32,432,432 units for gross proceeds of $11,999,999.80 from both offerings combined.
Regulatory and Compliance Considerations
Certain subscribers under the Sidecar Private Placement are expected to be directors and management of the company, making this a 'related party transaction' under Multilateral Instrument 61-101 (MI 61-101). However, the transactions will be exempt from formal valuation and minority shareholder approval requirements as the fair market value of the securities issued or the consideration paid will not exceed 25% of the company’s market capitalization.
The company is also aware that the proposed placement would breach ASX Listing Rules 7.1 and 10.11 if it proceeds. The ASX reserves the right to take further enforcement action against Lion One, including potential censure or removal from the official list.
About Lion One Metals Limited
Lion One Metals is an emerging Canadian gold producer headquartered in North Vancouver, BC. The company has established new operations at its 100% owned Tuvatu Alkaline Gold Project in Fiji. The Tuvatu project includes the high-grade Tuvatu Alkaline Gold Deposit, the Underground Gold Mine, the Pilot Plant, and the Assay Lab. The company also holds an extensive exploration license covering the entire Navilawa Caldera, which hosts multiple mineralized zones and highly prospective exploration targets.
The announcement of the $2 million Sidecar Private Placement is likely to have a positive impact on Lion One Metals' stock, as it demonstrates strong market demand and provides additional working capital for the company's operations. However, potential regulatory issues with the ASX could create some uncertainty among investors.
Investor Reaction:
Analysts and investors are likely to view the private placement as a positive step towards securing additional funds for the company's ongoing projects. However, the potential regulatory issues with the ASX may cause some concern.
Conclusion:
Investors should keep an eye on the completion of the Sidecar Private Placement and the LIFE Offering, as well as any regulatory developments with the ASX. These factors will be crucial in assessing the long-term impact on Lion One Metals' stock and overall financial health.