Defense Metals Closes Private Placement Financing

Apr 5, 2022

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VANCOUVER, BC, April 5, 2022 /CNW/ - Defense Metals Corp. ("Defense Metals" or the "Company") (TSXV:DEFN) (OTCQB:DFMTF) (FSE:35D) is pleased to announce that it has closed a non-brokered private placement (the "Private Placement") for gross proceeds of $4,558,049.57, consisting of 6,340,057 flow-through common shares of the Company (each, a "FT Share") at a price of $0.35 per FT Share and 8,996,267 units of the Company (each, a "Unit") at a price of $0.26 per Unit.


Each FT Share is a "flow-through share" within the meaning of the Income Tax Act (Canada) (the "Act"). Each Unit consists of one common share of the Company and one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to purchase one common share of the Company at a price of $0.40 for a period of 24 months from the date of issuance, provided that if after four months from the date of issue and prior to the expiry of the Warrants, the closing price of the common shares of the Company is equal to or greater than $0.60 for a period of 15 consecutive trading days, the Company will have the right to accelerate the expiry of the Warrants by giving notice to the holders that the Warrants will expire 15 days from the date of notice.


The proceeds of the Private Placement will be used for the exploration and development of the Company's Wicheeda Rare Earth Element Project located near Prince George, British Columbia and for general working capital purposes.


In connection with the Private Placement, the Company paid aggregate cash finder's fees of $162,152.92 and issued 487,087 non-transferable finder warrants to Leede Jones Gable Inc., Qwest Investment Fund Management Ltd., Accilent Capital Management Inc., iA Private Wealth Inc., Haywood Securities Inc., Canaccord Genuity Corp., Research Capital Corporation and Glores Securities Inc. The finder warrants are exercisable for a period of 24 months from issuance at a price of $0.35 per share.


An insider-director of the Company subscribed for 60,000 Units, which participation constituted a "related party transaction" within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Such participation is exempt from the formal valuation and minority shareholder approval requirements under MI 61-101 pursuant to subsections 5.5(b) and 5.7(1)(a) as the Company's common shares are not listed on a specified market and the fair market value of the securities acquired do not exceed 25% of the Company's market capitalization.


All securities issued under the Private Placement are subject to a four month hold period in accordance with applicable securities laws.


About the Wicheeda REE Project

The 100% owned 2,008-hectare Wicheeda REE Property, located approximately 80 km northeast of the city of Prince George, British Columbia, is readily accessible by all-weather gravel roads and is near infrastructure, including power transmission lines, the CN railway, and major highways.


The Wicheeda REE Project yielded a robust 2021 PEA that demonstrated an after-tax net present value (NPV@8%) of $517 million, and 18% IRR1. A unique advantage of the Wicheeda REE Project is the production of a saleable high-grade flotation-concentrate. The PEA contemplates a 1.8 Mtpa (million tonnes per year) mill throughput open pit mining operation with 1.75:1 (waste:mill feed) strip ratio over a 19 year mine (project) life producing and average of 25,423 tonnes REO annually. A Phase 1 initial pit strip ratio of 0.63:1 (waste:mill feed) would yield rapid access to higher grade surface mineralization in year 1 and payback of $440 million initial capital within 5 years.


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1 Independent Preliminary Economic Assessment for the Wicheeda Rare Earth Element Project, British Columbia, Canada, dated January 6, 2022, with an effective date of November 7, 2021, and prepared by SRK Consulting (Canada) Inc. is filed under Defense Metals Corp.'s Issuer Profile on SEDAR (www.sedar.com).