Mogotes Metals closes $26.99-million in financings

Executive Summary

• Mogotes Metals Inc. has closed two non-brokered private placements, raising aggregate gross proceeds of approximately $27 million.
• The financing consists of two tranches: 86,792,425 units at $0.265 per unit and 12.5 million units at $0.32 per unit.
• The transaction includes significant investor rights agreements with CD Capital Fund IV LP, including pre-emptive rights, top-up rights, and director nomination rights, with a portion of CD Capital's shares held in escrow pending TSX-V approval.

Key Details

• Aggregate Gross Proceeds: $26,999,992.63
• Tranche 1: 86,792,425 units issued at $0.265 per unit.
• Tranche 2: 12,500,000 units issued at $0.32 per unit.
• Unit Composition: Each unit consists of one common share and one-half of one common share purchase warrant.
• Warrant Terms: Each warrant entitles the holder to acquire one common share at an exercise price of $0.53 per share for a period of three years from the closing date.
• Use of Proceeds: General corporate and working capital purposes.
• CD Capital Fund IV LP Investment:
  • Subscription proceeds: $5,327,347.205.
  • Units issued: 20,103,197 units.
  • These units are held in escrow pending approval of the TSX Venture Exchange.
• Investor Rights Agreement with CD Capital:
  • Pre-emptive Right: To participate in future equity financings on the same terms to preserve ownership stake while holding 5% or more of issued shares.
  • Top-up Right: To purchase additional shares if conversions or property-related issuances dilute CD Capital's stake by 2% or more.
  • Subscription Option: Exercisable at any time within five years to increase holdings to up to 19.9% of issued and outstanding shares.
  • Director Nomination: Right to nominate one director to the board for as long as CD Capital holds 5% or more of issued shares.
• Related Party Transaction:
  • Insiders purchased an aggregate of 16,000,000 units.
  • The company relied on exemptions from valuation and minority shareholder approval requirements under MI 61-101 (sections 5.5(b) and 5.7(1)(a)) as it is not listed on a specified market and insider participation does not exceed 25% of market capitalization.
  • No material change report was filed 21 days prior to closing to expedite the offering.
• Hold Periods:
  • Securities issued to subscribers in Canada and the US are subject to a hold period of four months plus one day from issuance.
  • Units issued pursuant to Ontario Securities Commission Rule 72-503 (Distributions Outside Canada) are not subject to statutory hold periods, subject to other applicable laws.
• Qualified Person: Stephen Nano, Director and Technical Adviser, has reviewed and approved the scientific and technical disclosure for the Filo Sur project.