21:22:19 EST Sat 03 Dec 2022
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Graphano Energy Ltd
Symbol GEL
Shares Issued 15,154,566
Close 2021-12-23 C$ 0.53
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Graphano begins drilling at Lac Aux Bouleaux

2021-12-23 07:29 ET - News Release

Ms. Luisa Moreno reports


Graphano Energy Ltd.'s 2022 drilling program at its Lac Aux Bouleaux (LAB) graphite project in Quebec is under way. Details of the drilling program will be outlined in the coming weeks. To finance the drill program, the company is pleased to also announce that it has completed a non-brokered private placement offering, issuing an aggregate 1,562,500 flow-through units (each, an FT unit) at a price of 80 cents per FT unit for aggregate gross proceeds of $1.25-million.

Each FT unit consists of one common share of the company that qualifies as a flow-through share for the purposes of the Income Tax Act (Canada) and one-half of one common share purchase warrant of the company, whereby each whole common share purchase warrant of the company entitles the holder thereof to purchase a common share of the company at an exercise price of $1.10 until Dec. 23, 2023.

The proceeds will be used for Canadian exploration expenses (CEE) and flow-through mining expenditures as defined in the Income Tax Act (Canada), which will be incurred on or before Dec. 31, 2022, and renounced with an effective date no later than Dec. 31, 2021, to the initial subscribers of the FT units in an aggregate amount not less than the proceeds. In addition, with respect to Quebec resident subscribers who are eligible individuals under the Taxation Act (Quebec), the CEE will also qualify for inclusion in the "exploration base relating to certain Quebec exploration expenses" within the meaning of Section 726.4.10 of the Taxation Act (Quebec) and for inclusion in the "exploration base relating to certain Quebec surface mining expenses or oil and gas exploration expenses" within the meaning of Section 726.4.17.2 of the Taxation Act (Quebec). If the qualifying expenditures are reduced by the Canada Revenue Agency, the company will indemnify each FT share subscriber for any additional taxes payable by such subscriber as a result of the company's failure to renounce the qualifying expenditures as agreed.

In connection with the offering, the company paid a cash finder's fee of $75,000, representing 6 per cent of the proceeds raised from investors introduced to the company by GloRes Securities Inc., and issued an aggregate of 93,750 finders' warrants, representing 6 per cent of the number of FT units sold under the offering. Each finder's warrant is exercisable into a share at an exercise price of $1.10 until Dec. 23, 2023.

The offering was carried out pursuant to prospectus exemptions of applicable securities laws and is subject to final acceptance by the TSX Venture Exchange. All securities issued pursuant to the offering are subject to a hold period of four months plus a day from the date of issuance, expiring on April 24, 2022, and the resale rules of applicable securities legislation.

Corporate update

Since the company's listing on the TSX Venture Exchange on Sept. 30, 2021, Graphano Energy has been active in the field performing detailed exploration work, which resulted in several new graphite showings being identified in the eastern and southern areas of the LAB property. Additional geophysics and trenching work will be performed throughout the LAB property, particularly in the central and northern regions) with the aim of identifying additional high-grade showings.

The company is currently compiling and analyzing current and historical data to develop an initial drilling plan scheduled to commence in late January, 2022. Graphano Energy will release details of the drilling program in the coming weeks.

Luisa Moreno, chief executive officer of the company, commented, "With the flow-through financing, we are well positioned to continue our aggressive exploration approach to advance our LAB graphite project and we look forward to reaching progressive milestones that have the potential to create significant shareholder value."

She added: "Graphano Energy's stock has been under pressure in part because of our early success, but we are just starting. We are pleased to close the flow-through financing and grateful to all our shareholders for joining us on this exciting journey. We look forward to a great 2022."

About Graphano Energy Ltd.

Graphano Energy is an exploration and development company that is focused on evaluating, acquiring and developing energy metals resources from exploration to production.

Graphite is one of the most in-demand technology minerals that is required for a green and sustainable world. The company's Lac Aux Bouleaux property in Quebec, Canada, has historically been an active area for natural graphite. With the demand for graphite growing in some of the most prominent and cutting-edge industries, such as lithium batteries in electric cars and other energy storage technologies, Graphano Energy is developing its project to meet the demands of the future.

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