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Arctic Star closes $869,050 1st tranche of financing
2022-03-11 16:01 ET - News Release
Mr. Patrick Power reports
ARCTIC STAR CLOSES FIRST TRANCHE UNIT PRIVATE PLACEMENT
Arctic Star Exploration Corp. has closed the first tranche of the company's non-brokered private placement of 8,186,430 non-flow-through (NFT) units of the company at seven cents per NFT unit and 3.7 million flow-through (FT) units at eight cents per FT unit for a total gross proceeds of $869,050.10. The company intends to complete additional tranche(s) of the balance FT units and NFT units offered under the private placement.
Upon closing of the first tranche of the private placement, the company issued a total of 11,886,430 common shares in the share capital of the company and 10,036,430 non-transferable share purchase warrants. The company issued 3.7 million shares as part of the FT units, which were issued as flow-through shares within the meaning of the Income Tax Act (Canada).
The warrants are exercisable to purchase 8,186,430 shares at 10 cents per share (for the warrants issued as part of the NFT units) and 1.85 million shares at 15 cents per share (for the warrants issued as part of the FT units) until on March 10, 2024, or earlier subject to an accelerated option clause. Pursuant to the acceleration clause, if the shares close at or above 30 cents for five consecutive trading days on the TSX Venture Exchange, then the warrants must be exercised within a 60-day period by the warrantholders, or, failing which, the warrants shall expire as null and void.
The company paid aggregate cash finders' fees of $27,042 and issued an aggregate 363,279 non-transferable share purchase warrants to certain eligible finders. The finders' warrants are exercisable to purchase 202,029 shares at 10 cents per share and 161,250 shares at 15 cents per share. The finders' warrants expire on March 10, 2024, or earlier subject to the acceleration clause.
All securities issued in connection with the first tranche of the private placement are subject to a statutory hold period expiring on July 11, 2022, in accordance with applicable securities legislation.
The company intends to use the net proceeds from the private placement to carry out exploration on its Diagras joint venture (81.5 per cent Arctic Star) commencing in March. The plan is to complete 10 holes at the diamond-bearing Sequoia kimberlite complex. This drilling will help define the size of the complex, the micro-diamond grade and geology. After drilling at Sequoia, the drill is expected to be deployed to discover new kimberlites. Phase 1 of the airborne survey completed coverage of 46 per cent of the property in late 2021. The company's geophysical consultants have selected over 33 possible kimberlite targets from a review of this work and ground crews are expected to be deployed to follow these up. Phase 2 of the airborne survey is also expected to be completed. A portion of the net proceeds from the NFT units will be used for general and corporate purposes.