Electric Metals closes $4-million private placement

Executive Summary

• Electric Metals (USA) Ltd. has closed a non-brokered private placement, raising gross proceeds of approximately $4 million to advance its North Star manganese project in Minnesota.
• The financing is led by cornerstone investors Eric Sprott and Crescat Capital, with participation from company directors and other existing shareholders.
• Net proceeds will fund technical studies, environmental baseline work, and permitting for the Emily mine, supporting the development of a domestic U.S. supply of high-purity manganese sulphate monohydrate (HPMSM).

Key Details

• Gross Proceeds: Approximately $4 million.
• Units Issued: 13.33 million units.
• Price Per Unit: 30 cents CAD.
• Warrant Terms: Each unit includes one-half of one non-transferable common share purchase warrant. Each warrant entitles the holder to acquire one additional share at an exercise price of 45 cents for a period of 18 months.
• Use of Proceeds: Advancing key initiatives including additional ore characterization, metallurgical and process testwork, an HPMSM scoping study, environmental baseline studies, initiation of permitting for the Emily mine, community outreach, and general corporate purposes.
• Key Investors: Eric Sprott and Crescat Capital acted as cornerstone investors. Mr. Sprott holds approximately 11.4% on a partially diluted basis assuming exercise of convertible securities.
• Insider Participation: Directors subscribed for 426,666 units for total consideration of $127,999.80. This constitutes a related-party transaction where exemptions from formal valuation and minority approval were relied upon as the value did not exceed 25% of market capitalization.
• Project Context: The financing supports the North Star manganese project, which includes the Emily manganese mine (highest-grade in North America) and a chemical plant for HPMSM production, aiming to reduce reliance on Chinese-produced manganese for the U.S. EV battery sector.

Notable Quotes

• Kevin Smith, CFA, Founder and CEO of Crescat Capital: "The positive PEA confirms the strong economics and strategic importance of the North Star manganese project as a potential domestic source of high-purity manganese. With 96 per cent of HPMSM still produced in China, Electric Metals is well positioned to advance this critical U.S. supply chain opportunity, and we're pleased to continue our support as cornerstone investors."
• Brian Savage, CEO, Electric Metals: "Completion of the positive PEA marks a major milestone for Electric Metals, confirming the strong potential of the North Star manganese project. This financing strengthens our ability to advance key technical, environmental and permitting initiatives as we move the project toward development."