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VANCOUVER, BC, Dec. 21, 2021 /CNW/ - Rhyolite Resources Ltd.
(TSXV: RYE) ("Rhyolite" or the "Company") is pleased to
announce that, further to its news release dated December 7, 2021, the Company has completed a
"bought deal" brokered private placement of 16,000,000 common
shares (the "Common Shares") of the Company at a price of
C$0.88 per Common Share (the
"Offering Price") for gross proceeds of approximately
C$14 million (the "Bought Deal Private Placement"). BMO
Capital Markets ("BMO") acted as the sole underwriter in respect of
the Bought Deal Private Placement and received a cash commission
equal to 6.0% of the gross proceeds thereon.
Rhyolite also closed its previously announced non-brokered
private placement of approximately C$4
million at a price per Common Share equal to the Offering
Price (the "Non-Brokered Private Placement", and together with the
Bought Deal Private Placement, the "Offering"). No finders fees or
commissions were paid in connection with the Non-Brokered Private
Placement.
The Company intends to use the net proceeds of the Offering for
furthering engineering work on Muckahi equipment, procurement of
Muckahi equipment, exploration in Suriname, and corporate
purposes.
Fred Stanford, CEO of Rhyolite,
commented: "Regarding both financial and ESG outcomes, the Muckahi
Mining System has the potential to be a positive disruptor of the
underground hard rock mining industry. In an industry that is
slow to change, at Rhyolite, with Muckahi, we are intent on picking
up the pace. We appreciate the time and energy of investors
and the BMO team to investigate and understand the opportunities
that Muckahi provides. With this capital injection we intend
to bring the Muckahi Mining System to commercial readiness.
From that platform, we look forward to rapidly changing the
industry to achieve superior financial and ESG outcomes."
All Common Shares issued under the Offering are subject to a
hold period expiring on April 22,
2022 in accordance with applicable securities laws.
MI 61-101 Disclosure
The Non-Brokered Private Placement constitutes a "related party
transaction" within the meaning of Multilateral Instrument
61-101 – Protection of Minority Security Holders in Special
Transactions ("MI 61-101") as certain directors and
officers of the Company purchased an aggregate of
3,479,637 Common Shares. The Company has relied on exemptions
from the formal valuation and minority shareholder approval
requirements of MI 61-101 contained in sections 5.5(a) and
5.7(1)(a) of MI 61-101 in respect of related party participation in
the Non-Brokered Private Placement as neither the fair market value
(as determined under MI 61-101) of the subject matter of, nor the
fair market value of the consideration for, the transaction,
insofar as it involved the related parties, exceeded 25% of the
Company's market capitalization (as determined under MI 61-101).
Further details will be included in a material change report to be
filed by the Company. A material change report will be filed in
connection with the related party participation in the Non-Brokered
Private Placement less than 21 days in advance of closing of the
Non-Brokered Private Placement as approval of the Non-Brokered
Private Placement occurred less than 21 days prior to
closing. The Non-Brokered Private Placement was approved by
the board of directors of the Company, with directors participating
in the Non-Brokered Private Placement abstaining from the vote in
respect thereof.
The securities offered have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent
registration or an applicable exemption from the registration
requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any
sale of the securities in any State in which such offer,
solicitation or sale would be unlawful.
Early Warning Disclosure
Tyrus Capital Event Master Fund Limited ("Tyrus"), an investment
fund managed by Tony Chedraoui, a
director of the Company, subscribed for 3,098,864 Common Shares
under the Non-Brokered Private Placement for aggregate
consideration of approximately $2,727,000. Immediately prior to the completion
of the Offering, Tyrus held 8,000,000 Common Shares and Mr.
Chedraoui held 3,830,000 Common Shares, representing collectively
approximately 12.3% of the issued and outstanding Common Shares on
a non-diluted basis. Mr. Chedraoui has control and direction over
the Common Shares held by Tyrus.
Following completion of the Offering, Mr. Chedraoui, together
with Tyrus, hold and control 14,928,864 Common Shares, representing
approximately 12.3% of the issued an outstanding Common Shares on a
non-diluted basis. Tyrus has acquired the Common Shares for
investment purposes.
A copy of the early warning report to be filed by Mr. Chedraoui
in connection with the acquisition of the Common Shares by Tyrus
will be available on SEDAR at www.sedar.com under the
Company's profile. A copy of such report will also be
available upon written request to the Company at
info@rhyoliteresources.com.
Forward-Looking Statements
This news release includes certain "forward-looking
statements" under applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to,
statements with respect to the use of proceeds of the Offering.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties and other factors
which may cause the actual results and future events to differ
materially from those expressed or implied by such forward-looking
statements. Such factors include, but are not limited to: general
business, economic, competitive, political and social
uncertainties; delay or failure to receive regulatory approvals;
the ability to attract financing on these terms or at all; the
price of commodities; and the results of current exploration. There
can be no assurance that such statements will prove to be accurate,
as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements. The Company
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
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SOURCE Rhyolite Resources Ltd.