Mr. Tim Gabruch reports
ISOENERGY ANNOUNCES $15.3 MILLION FINANCING
IsoEnergy Ltd. has reached agreements for a $15.3-million financing package, consisting of a $5-million non-brokered private placement of common shares, a concurrent private placement of $5.3-million in convertible debentures and a $5-million bought deal private placement of charitable flow-through shares.
The company will be undertaking a $5-million non-brokered private placement, pursuant to which approximately 1.5 million common shares will be issued at a price of $3.33 per share to NexGen Energy Ltd.
The company has also entered into a binding term sheet with Queen's Road Capital Investment Ltd. (QRC) for a $4-million (U.S.) (approximately $5.3-million) private placement of unsecured convertible debentures.
in addition, the company has entered into an agreement with PI Financial Corp. on behalf of a syndicate of underwriters, pursuant to which the underwriters have agreed to purchase, on a bought deal private placement basis, 940,000 common shares of the company, each to be issued as a charitable flow-through share within the meaning of the Income Tax Act (Canada) at a price of $5.35 per flow-through share for gross proceeds of $5-million.
Tim Gabruch, president and chief executive officer of IsoEnergy, commented: "We are very pleased that our majority shareholder, NexGen Energy, and our strategic investor, Queen's Road Capital, have agreed to make further investments in IsoEnergy. NexGen has supported multiple aspects of IsoEnergy's growth and development since our 2016 inception, and Warren Gilman and the Queen's Road team have been strong partners and highly supportive of IsoEnergy's activities in the Athabasca basin as we have advanced our exploration properties and progressed the world-class Hurricane deposit. We welcome NexGen and QRC's continued involvement, which demonstrates their ongoing confidence in our asset base and strategic approach. We are also pleased with the strong interest from the broader investment community to invest in IsoEnergy. Following the completion of the offerings, IsoEnergy will have over $17-million in the treasury and will be fully funded through its next phase of exploration and development."
Terms of the debentures
The debentures will carry a 10-per-cent coupon over a five-year term and will have similar provisions as the convertible debenture issued to QRC in 2020. The debentures will be convertible at QRC's option into common shares of the company at a conversion price of $4.33, which is equal to a 30-per-cent premium to the private placement price.
The interest is payable semi-annually, with 7.5 per cent payable in cash and 2.5 per cent payable in common shares of the company, subject to TSX Venture Exchange approval, at a price equal to the 20-day volume-weighted average market price of the company's common shares on the TSX-V prior to the date such interest is due.
For additional information regarding the terms of the debentures, readers are encouraged to review the debentures, which will be available on the company's profile following the closing of the offerings.
The offerings are expected to close on or about Dec. 6, 2022, and are subject to the satisfaction of customary closing conditions for transactions of this nature, including the completion of due diligence by QRC, the execution of definitive documentation and the receipt of all necessary stock exchange and regulatory approvals. The securities issued under the offerings will be subject to a statutory hold period in Canada expiring four months and one day from the closing date.
The proceeds of the flow-through offering will be used to incur Canadian exploration expenses, as defined in Subsection 66.1(6) of the income tax act, and flow-through mining expenditures, as defined in Subsection 127(9) of the income tax act. Such proceeds will be renounced to the subscribers with an effective date not later than Dec. 31, 2022, in the aggregate amount of not less than the total amount of gross proceeds raised from the issue of flow-through shares. The net proceeds of the debenture financing and private placement will be used for further exploration and development of the company's Athabasca properties and for general corporate purposes.
The company anticipates that insiders of the company, in addition to NexGen, will purchase (directly or indirectly) common shares in connection with the offerings. The acquisition of common shares by insiders (including NexGen) is considered a related party transaction subject to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(a) of MI 61-101 on the basis that the participation in the private placement by such insiders will not exceed 25 per cent of the fair market value of the company's market capitalization. A material change report in connection with the private placement will be filed less than 21 days before the closing of the private placement. This shorter period is reasonable and necessary in the circumstances as the company wishes to complete the private placement in a timely manner.
In addition to the offerings, the underwriters and the company may agree to an additional offering of up to $2-million in common shares that are not flow-through shares, at a price per share equal to the private placement price, with NexGen having a right to subscribe for an equal number of shares on the same terms.
About IsoEnergy Ltd.
IsoEnergy is a well-financed uranium exploration and development company with a portfolio of prospective projects in the infrastructure-rich eastern Athabasca basin in Saskatchewan, Canada. In 2018, the company discovered the high-grade Hurricane deposit on its 100-per-cent-owned Larocque East property in the eastern Athabasca basin. The Hurricane deposit has indicated mineral resources of 48.61 million pounds U3O8 (triuranium octoxide) based on 63,800 tonnes grading 34.5 per cent U3O8 and inferred mineral resources of 2.66 million pounds U3O8 based on 54,300 tonnes grading 2.2 per cent U3O8 (July 8, 2022). The Hurricane deposit is 100 per cent owned by IsoEnergy and is unencumbered from any royalties. IsoEnergy is led by a board and management team with a record of success in uranium exploration, development and operations. The company was founded and is supported by the team at its major shareholder, NexGen Energy.
Qualified person statement
All scientific and technical information in this press release has been reviewed and approved by Andy Carmichael, PGeo, IsoEnergy's vice-president, exploration. Mr. Carmichael is a qualified person for the purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects. For additional information regarding the company's Larocque East property, please see the technical report titled "Technical Report on the Larocque East Project, Northern Saskatchewan, Canada," dated Aug. 4, 2022, available on the company's profile.
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