Defense Metals raises $16.15-million in financings

Executive Summary

• Defense Metals Corp. has closed its previously announced brokered and non-brokered private placement, raising aggregate gross proceeds of $16,153,334.
• The company intends to use the net proceeds to fund the bankable feasibility study for the Wicheeda project, optimization and pilot plant test work, energy/transmission studies, and general corporate purposes.
• The offering included the full exercise of the over-allotment option, with units priced at 30 cents each, consisting of one common share and one-half of a warrant exercisable at 45 cents.

Key Details

• Total Gross Proceeds: $16,153,334.
• Brokered Offering:
  • Gross proceeds: $11,500,200.
  • Units issued: 38,334,000 units.
  • Price per unit: 30 cents.
  • Included full exercise of the 15% over-allotment option.
  • Agents: Paradigm Capital Inc. (lead agent/sole bookrunner) and EAS Advisors LLC (acting through Odeon Capital Group LLC).
  • Agent Compensation: $805,014 in cash commissions and 2,683,380 non-transferable compensation options (exercisable at 30 cents, expiring Oct 31, 2028).
• Non-Brokered Offering:
  • Gross proceeds: $4,653,134.
  • Units issued: 15,510,446 units.
  • Second Tranche: The company expects to close a second tranche in the coming days for up to $570,000 in additional gross proceeds.
  • Finder Fees: $41,582 paid, plus 63,708 compensation options issued to arm's-length finders.
• Security Terms:
  • Each unit consists of one Class A common share and one-half of one common share purchase warrant.
  • Warrant Exercise Price: 45 cents per common share.
  • Warrant Expiry: On or before Oct. 31, 2028.
  • Accelerated Expiry: Warrants expire 30 days after notice if shares trade at or above 90 cents for 10 consecutive trading days.
• Use of Proceeds:
  • Continue optimization test work on the flowsheet from the 2025 prefeasibility study.
  • Complete pilot plant test work supporting the optimized flowsheet.
  • Conduct energy and transmission studies.
  • Commence feasibility study on the Wicheeda project in early 2026.
  • Continue baseline studies for future permitting.
  • Operating expenses and general corporate purposes.
• Insider Participation:
  • Insiders participated in the non-brokered offering for approximately $670,300.
  • Transaction classified as a related party transaction under MI 61-101; exemptions from formal valuation and minority shareholder approval were relied upon as the interested party interest did not exceed 25% of market capitalization.
• Regulatory/Hold Periods:
  • Units issued to Canadian residents under the Listed Issuer Financing Exemption (LIFE) are not subject to a statutory hold period, except for a four-month TSX Venture Exchange hold period for certain purchasers expiring March 1, 2026.
  • Offering subject to final approval of the TSX-V.

Notable Quotes

• "I am extremely pleased with the level of support in relation to the offering and would like to thank our financial partners and all of the investors, both existing and new, for their enthusiasm and support," said Mark Tory, chief executive officer of Defense Metals. "We are now in a solid financial position to move forward with starting the bankable feasibility study in the first quarter next year."