Completes C$10 Million Private Placement HIGHLIGHTS
- C$10 million raised with the issue of 9,090,909 shares
- Proceeds will be used to fund exploration at the Eastmain Project, Quebec
Vancouver, British Columbia--(Newsfile Corp. - August 31, 2021) - Benz Mining Corp. (TSXV: BZ) (ASX: BNZ) (the Company or Benz) is pleased to advise that has raised C$10 million (before costs) from the placement of 9,090,909 shares at a price of C$1.10 per share (Placement) which represents an 80% premium to the last closing price of Benz shares on the TSXV on 27 August 2021 of C$0.61.
The Company was able to issue the Placement shares at a premium as they were issued as Canadian charity flow-through shares, which provides tax incentives to those investors for expenditures that qualify as flow-through mining expenditures under the Income Tax Act (Canada) (Act).
The term "flow-through share" is a defined term in the Act and is not a special type of share under corporate law. In this case, flow-through share refers to an ordinary share that will be issued by the Company to the investor under a written agreement with the investor whereby the Company agrees to incur flow-through mining expenditure, and to renounce tax losses associated with that expenditure to the investor. If the Company and the investor comply with the rules of the Act, the investor will be entitled to deduct the amount renounced in computing the investor's income for Canadian income tax purposes and, as a result, the flow-through shares are issued at a higher price.
The issue of 9,090,909 shares under the Placement will utilise the Company's issuance capacity under ASX Listing Rule 7.1. The shares issued under the Placement will be subject to a four month hold period in Canada.
The gross proceeds received by the Company will be used to fund exploration on the Company's Eastmain Project in Quebec by 31 December 2022 and renounce such expenditures to the investors effective 31 December 2021.
The Placement was facilitated by Canadian flow-through share dealer, Peartree Securities Inc, and Peloton Capital Pty Ltd. The Company agreed to pay finders fees of 6% cash and 909,090 broker warrants under the Placement, with each broker warrant exercisable for one share at a price of C$0.65 for a period of two years from the date of issuance.