Mr. John Ryan reports
BUNKER CLOSES $1.5M NON-BROKERED PRIVATE PLACEMENT OF COMMON SHARES
Bunker Hill Mining Corp. has closed the first tranche of the non-brokered private placement of 30 million shares of the company at five cents per common share for gross proceeds of $1.5-million that was previously announced in the company's July 18, 2019, and Aug. 1, 2019, news releases. The company has the option to increase the size of the offering by up to an additional 4,665,800 common shares.
The first tranche consisted of the sale of 30 million common shares, of which 1,986,660 common shares were issued in satisfaction of indebtedness owed to creditors of the company for services previously rendered by them and in respect of loans made previously to the company.
The company has received sufficient interest to exercise the overallotment option and expects to close the final tranche of the offering in the coming weeks.
Related-party transaction and early warning reports
In connection with the first tranche, Wayne Parsons, a director of the company, has acquired 813,338 common shares. Prior to the first tranche, Mr. Parsons had beneficial ownership over 4,773,334 common shares and 4,773,334 warrants (or approximately 21.52 per cent of the then issued and outstanding common shares) on a partially diluted basis. In addition to, and in connection with the issuance of, the 30 million common shares pursuant to the first tranche, the company has issued 1,912,000 units of the company to Sebastian Marr, a control person of the company, in consideration for advising services rendered by Mr. Marr to the company. Each compensation unit consists of one common share and one common share purchase warrant exercisable into a common share at the price of five cents for 24 months. Prior to the closing of the first tranche, Mr. Marr had beneficial ownership over 8,763,200 common shares and 8,763,200 warrants (or approximately 36.25 per cent of the then issued and outstanding common shares). Following the completion of the first tranche, Mr. Parsons has beneficial ownership over 5,586,672 common shares and 4,773,334 warrants (or approximately 13.58 per cent of the issued and outstanding common shares), and Mr. Marr has beneficial ownership over 10,675,200 common shares and 10,675,200 warrants (or approximately 25.98 per cent of the issued and outstanding common shares), calculated on a partially diluted basis.
This issuance of common shares to Mr. Parsons, and of compensation units to Mr. Marr, in connection with the first tranche, is considered a related-party transaction as such term is defined under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The company is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under MI 61-101 on the basis that the issuance of the securities to insiders in connection with the offering does not exceed 25 per cent of the fair market value of the company's market capitalization.
The company did not file a material change report disclosing the related-party transaction more than 21 days before the expected closing date of the first tranche, as the details of the first tranche and the participation therein by each insider of the company were not settled until shortly prior to the closing of the first tranche.
The securities were acquired by Mr. Parsons and Mr. Marr for investment purposes, and depending on market and other conditions, each of them may from time to time in the future increase or decrease their respective ownerships, control or direction over securities of the company through market transactions, private agreements or otherwise.
In satisfaction of the requirements of the National Instrument 62-104 (Take-Over Bids And Issuer Bids) and National Instrument 62-103 (the Early Warning System and Related Take-Over Bid and Insider Reporting Issues), early warning reports respecting the acquisition of securities of the company by Mr. Parsons and Mr. Marr will be filed under the company's SEDAR profile.
The net proceeds from the offering shall be primarily used for lease and other payments required to keep the company's option interest in Bunker Hill mine in good standing, for further development of the Bunker Hill mine, and for general corporate and working capital purposes.
The securities issued in connection with the offering are subject to a customary four-month-and-a-day hold period in accordance with applicable Canadian securities laws and to a concurrent six-month hold period in accordance with applicable U.S. securities laws.
About Bunker Hill Mining Corp.
Bunker Hill Mining has an option to acquire 100 per cent of the Bunker Hill mine.
We seek Safe Harbor.
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