Our SPC ( Sudbury Platinum Corp) Spin-out moving quickly
Edison Cobalt, Sudbury arrange $3.5M private placement
2020-02-05 14:25 ET - News Release
Mr. Christopher Hobbs reports
EDISON COBALT AND SUDBURY PLATINUM LAUNCH RTO PRIVATE PLACEMENT OF $3.5 MILLION CO-LED BY GRAVITAS SECURITIES AND RED CLOUD SECURITIES
Edison Cobalt Corp. and Sudbury Platinum Corp. (SPC), in connection with the previously announced merger transaction between Edison Cobalt and SPC that will result in a reverse takeover (RTO) of Edison by SPC, with the resulting issuer to be called SPC Metals, have engaged Gravitas Securities Inc. as co-lead agent, with Red Cloud Securities Inc., to complete a best efforts brokered private placement of up to 14 million subscription receipts, at a price of 25 cents per subscription receipt, for gross proceeds of up to $3.5-million.
Edison president and chief executive officer Neil Pettigrew commented: "We are very excited to initiate the financing as a step toward completing the RTO transaction with SPC. By combining the two corporations, we are launching Canada's next pre-eminent nickel and PGM company. SPC brings exceptional assets in the heart of the world-class Sudbury mining camp and a team of proven mine finders to the deal at a time when both nickel and palladium have strong fundamental for growth now and for years to come."
The gross proceeds of the brokered financing, less an amount equal to the agents' expenses and 50 per cent of the agents' fee, will be delivered to and held by a licensed Canadian trust company or other escrow agent mutually acceptable to the agents, Edison and SPC, in an interest-bearing account, pending the satisfaction of certain escrow release conditions (including, among other things, the completion of all conditions precedent to the transaction to the satisfaction of the agents) prior to Aug. 20, 2020.
The gross proceeds of the brokered financing (less an amount equal to the agents' expenses and the agents' fee) will be used for exploration and development of SPC Metals' asset portfolio and financing completion of the RTO transaction.
Upon the satisfaction of the escrow release conditions, each subscription receipt will be automatically converted, without payment of any additional consideration, into one unit of SPC Metals. Each unit will comprise one common share of SPC Metals and one-half of one SPC Metals common share purchase warrant, with each whole warrant being exercisable, for a period of two years from the effective date of the transaction, to purchase one SPC Metals common share at a price of 40 cents per SPC Metals common share. The posttransaction capital structure for SPC Metals will reflect the issued share capital for Edison after giving effect to a 1:3.55 share consolidation and the issuance of SPC Metals common shares to current shareholders of SPC.
If (i) the escrow release conditions are not satisfied or waived on or before the escrow release deadline, or (ii) prior to the escrow release deadline, the amalgamation agreement between Edison and SPC is terminated or SPC or Edison advises the escrow agent or publicly announces that it does not intend to satisfy the escrow release conditions, the subscription receipt holders will be entitled to a return of the total subscription price paid, the escrowed funds (plus accrued interest earned thereon) will be returned to the subscription receipt holders on a pro rata basis and the subscription receipts will be cancelled without any further action on the part of the holders. SPC and Edison will be responsible for the payment of any shortfall between the escrowed funds and the subscription price paid by the holders of the subscription receipts.
The agents' compensation under the brokered private placement includes (a) a fee payable in cash equal to 8 per cent of the gross proceeds from the sale of subscription receipts; and (b) such number of options of SPC Metals as is equal to 8 per cent of the aggregate number of subscription receipts issued under the brokered financing, with each agents' compensation option exercisable at an exercise price of 25 cents per agents' compensation option for a period of two years from the effective date of the transaction into one unit of SPC Metals.
About Edison Cobalt Corp.
Edison Cobalt is a Canadian-based junior mining exploration company focused on the procurement, exploration and development of cobalt, lithium and other energy metals. Edison Cobalt's acquisition strategy focuses on acquiring affordable, cost-effective and highly regarded mineral properties in areas with proven geological potential.