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Clean Air Metals Inc
Symbol AIR
Shares Issued 140,000,516
Close 2021-02-23 C$ 0.35
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Clean Air Metals closes $11.5-million private placement

2021-02-23 13:31 ET - News Release

Mr. Abraham Drost reports

CLEAN AIR METALS ANNOUNCES CLOSING OF $11.5 MILLION BOUGHT DEAL PRIVATE PLACEMENT

Clean Air Metals Inc. has closed the previously announced bought deal private placement for total proceeds of approximately $11.5-million, consisting of: (i) 11,904,800 flow-through shares at a price of 42 cents per flow-through share; and (ii) 12,745,100 flow-through units at a price of 51 cents per flow-through unit, including the exercise of the underwriters' option. In connection with the offering, Paradigm Capital Inc. acted as sole bookrunner and lead underwriter on behalf of a syndicate of underwriters, including Clarus Securities Inc. and Echelon Wealth Partners Inc.

Each flow-through unit consists of one common share of the company and one-half of one common share purchase warrant of the company that each qualifies as a flow-through share (within the meaning of Subsection 66(15) of the Income Tax Act (Canada). Each warrant will entitle the holder thereof to acquire one common share of the company at a price of 55 cents until Feb. 23, 2023.

The company will use an amount equal to the gross proceeds received by the company from the sale of the flow-through shares and the flow-through units to incur eligible Canadian exploration expenses that will qualify as flow-through mining expenditures as such terms are defined in the Income Tax Act (Canada) related to the company's projects in Canada. All qualifying expenditures will be renounced in favour of the subscribers of the flow-through shares and flow-through units effective Dec. 31, 2021.

As consideration for the services provided by the underwriters in connection with the offering, the underwriters received: (a) a cash commission of $660,000.42, which is equal to 6 per cent of the gross proceeds of the offering (other than in respect of sales to those persons on the president list on which the cash commission was 3 per cent); and (b) an aggregate of 1,172,970 compensation options, which is equal to 5 per cent of the number of securities sold under the offering (and reduced to 2.5 per cent with respect to certain subscribers on the president list). Each compensation option is exercisable to acquire one common share of the company, issued on a non-flow-through basis at a price of 42 cents per compensation option share until Feb. 23, 2023.

Abraham Drost (chief executive officer and a director of the company), Kelsey Chin (chief financial officer of the company) and Jim Gallagher, MaryAnn Crichton, Dean Chambers and Ewan Downie (directors of the company) subscribed for an aggregate of 820,300 flow-through shares under the offering on the same terms as arm's-length investors. The participation of Mr. Drost, Ms. Chin, Mr. Gallagher, Ms. Crichton, Mr. Chambers and Mr. Downie in the offering constitutes a related party transaction for the purposes of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions.

The company is exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the offering in reliance on sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of the securities issued to Mr. Drost, Ms. Chin, Mr. Gallagher, Ms. Crichton, Mr. Chambers and Mr. Downie nor the fair market value of the consideration for the securities issued to Mr. Drost, Ms. Chin, Mr. Gallagher, Ms. Crichton, Mr. Chambers and Mr. Downie exceeds 25 per cent of the company's market capitalization as calculated in accordance with MI 61-101. The company did not file a material change report containing all of the disclosure required by MI 61-101 more than 21 days before the expected closing date of the offering as the aforementioned insider participation had not been confirmed at that time and the company wished to close the offering as expeditiously as possible.

The offering remains subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the final approval of the TSX Venture Exchange.

Management comment

Mr. Droststated: "We are very pleased to confirm the successful closing of the financing. Drilling with two drills has recommenced at the Escape Lake deposit. The program is focused on systematic stepouts to build additional tonnage and grade following up on the Escape Lake deposit and mineral trend identified in the new mineral resource announced Jan. 20, 2021.

The company plans to add a third drill to the Current Lake deposit in order to focus on resource infill drilling. The company is targeting completion of a preliminary economic assessment (PEA) on the Current Lake deposit in June, 2021. The PEA will be based on the recent mineral resource numbers and on bench-test-scale metallurgical test work on a drill-derived mini-bulk sample by Blue Coast Research in Victoria, B.C. This work is progressing under the supervision of Nordmin Engineering Ltd. as previously disclosed (Aug. 11, 2020).

The company is also testing a number of promising new geophysical targets in the search for the source of massive sulphide mineralization that has been documented in the Current Lake deposit.

Qualified person

Allan MacTavish, PGeo, a qualified person under National Instrument 43-101 and an employee of the company, has reviewed and approved all technical information in this press release.

About Clean Air Metals Inc.

Clean Air Metals' flagship asset is the Thunder Bay North project, a platinum, palladium, copper, nickel project located near the city of Thunder Bay, Ont., and the Lac des Iles mine owned by Impala Platinum Holdings. The Clean Air Metals project hosts the Current Lake deposit and magma conduit, and the company is actively exploring the Escape Lake deposit, a twin structure to the Current Lake deposit. Executive chairman Jim Gallagher, PEng, and chief executive officer Abraham Drost, PGeo, lead an experienced team of geologists and engineers who are using the Norilsk magma conduit stratigraphic and mineral deposit model to guide continuing exploration and development studies. As the former chief executive officer of North American Palladium Ltd., which owned the Lac des Iles mine prior to the sale to Impala Platinum in December, 2019, Mr. Gallagher and his team are credited with the mine turnaround and creation of significant value for shareholders.

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