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MGX Minerals Announces Closing of Special Warrant Offering

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

VANCOUVER, BRITISH COLUMBIA / May 12, 2017 / MGX Minerals Inc. (“MGX” or the “Company”) (CSE: XMG / FKT: 1MG / OTC: MGXMF) is pleased to announce the closing of the  Company’s previously announced private placement financing (the “Offering”) through the distribution of 3,555,556 special warrants of the Company (“Special Warrants”) at a price of CAD$0.90 per Special Warrant (the “Issue Price”) for gross proceeds of CAD$3.2 million. Each Special Warrant is exercisable, for no additional consideration, into one unit (“Unit”) of the Company. Each Unit shall be comprised of one common share (“Common Share”) and one common share purchase warrant (“Warrant”), with each Warrant entitling the holder to purchase one additional Common Share at a price of CAD$1.15 until May 12, 2019, subject to acceleration at any time prior to the expiry of the Warrants the ten day volume-weighted average trading price of the Common Shares exceeds CAD$2.00 then the Company may provide notice to the holders of the Warrants that the Warrants will expire 30 days after the date of the notice.

The Company intends to use the net proceeds from the Offering to reduce indebtedness (including trade payables and up to CAD$500,000 in repayment of a loan made to MGX by an officer of MGX) and for development and exploration of its Alberta Lithium Claims, Sturgeon Lake Property and Driftwood Property (each as described in the Company’s Annual Information Form, dated March 31, 2017) and for general working capital purposes.

In accordance with the terms of an agency agreement (the “Agency Agreement”) entered into by the Company and Mackie Research Capital Corp. (the “Agent”), the Agent received a cash commission equal to 8.5% of the aggregate gross proceeds from the Offering as well as rights to receive compensation options (“Compensation Options”) in an amount equal to 8.5% of the number of Special Warrants sold under the Offering. The Compensation Options are exercisable at any time until May 12, 2019 at an exercise price equal to the Issue Price. Each Compensation Option entitles the holder to purchase one Unit. In the event that the Company does not satisfy the Qualification Condition (as defined below) on or before the Qualification Deadline (as defined below) the Compensation Options will be exercisable for 1.1 Units.

Pursuant to the terms of the Agency Agreement, the Company has agreed to use its best efforts to obtain a receipt for a final short form prospectus qualifying the distribution of the Units upon exercise of the Special Warrants (the “Qualification Condition”) on or before June 26, 2017 (the “Qualification Deadline”). If the Qualification Condition is not satisfied before the Qualification Deadline, each Special Warrant shall become exercisable, without any action on the part of the holders of the Special Warrants, and for no additional consideration, to receive 1.1 Units. Prior to the satisfaction of the Qualification Condition, the Special Warrants and the Common Shares and Warrants comprising the Units will be subject to a statutory hold period until September 13, 2017.

The Company may close additional tranches of under the Offering prior to the earlier of the satisfaction of the Qualification Condition and the Qualification Deadline. For more information on the Offering, please refer to the Company’s news release, dated March 1, 2017 available on the Company’s profile on SEDAR at www.sedar.com and at www.mgxminerals.com.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.