Dear Shareholder,
As disclosed in our news release of July 8, 2022 Mineworx Technologies Ltd. (the “Corporation”) will be offering rights (the “Rights Offering”) to holders of its common shares (“Common Shares”) of record at the close of business on July 18, 2022 (the “Record Date”). The Rights Offering, if fully subscribed, will raise gross proceeds of just over $5.2 million. The funds will be used for general corporate expenditures and the capex and operational expenditures related to the construction/fabrication of Module 1 for the future commercial production facility.
The company has two options to raise these funds, a Private Placement or a Rights Offering. The success of a lowly priced, highly dilutive Private Placement with the existing market conditions and sentiment would be questionable. After careful consideration a Rights Offering was determined to be, by far, the best overall option for the Company’s stakeholders. With a Rights Offering existing shareholders participate in the funding based on their percentage ownership of the Corporation and the Company has the necessary funds to complete its objectives. There is an additional financial obligation to shareholders, but they participate on a pro rata basis with the Company’s upside.
We understand the difficulty that this raise will have on many shareholders, but it is the best option that is available at this time. With the successful build up and operation of Module 1 traditional debt financing will be available for future corporate expansion and operations. We are close to achieving our initial objective and feel that this undertaking will allow us to attain that goal.
The prior Rights Offering was very well received by the majority of the Company’s shareholders with a full 100% redemption of the Offering. As a matter of fact, there was a request for an additional 109 million shares or 34% of the outstanding shares that could not be filled because of our Shareholder’s participation. The funds raised allowed the Company to successfully move forward with the Tennessee pilot plant project as well as enabled the necessary work to be done on the Cehegin property which resulted in the Iron Bull Mining transaction.
Pursuant to the Rights Offering, each shareholder will receive one transferable right (each a “Right”) for each Common Share they own as of the Record Date. One Right will entitle the holder to subscribe for one Common Share upon payment of the subscription price of $0.015 per Common Share until 5pm (Eastern Standard Time) on September 12, 2022 (the “Expiry Time”). A shareholder can choose to exercise all of their Rights, a portion of their Rights, or none of their Rights.
Any eligible shareholder who exercises all of their Rights under the basic subscription privilege will have the opportunity to subscribe for additional Common Shares, if any, that were not subscribed for by other holders of Rights prior to the Expiry Time, on a pro rata basis (based on such shareholders percentage ownership of Common Shares), at the subscription price of $0.015 per Common Share. Please refer to the “Additional Subscription Privilege” as described in the Notice and Circular (as defined below).
The Rights will also be listed and posted for trading on the TSX Venture Exchange (the “TSXV”) under the symbol “MWX.RT” and will expire at 12:00 pm Toronto time on September 12, 2022. Therefore, shareholders can also choose to sell their Rights through the facilities of the TSXV if they do not intend to exercise such Rights. Also, in addition to subscribing for additional Common Shares pursuant to the Additional Subscription Privilege, shareholders can purchase additional Rights on the TSXV or from other shareholders, and then also exercise those Rights prior to the Expiry Time.
Each registered shareholder will receive a mail-out with the details of the Rights Offering from the Corporation’s transfer agent, Computershare Trust Company of Canada, which will include the Rights Offering Notice (“Notice”) and Rights Offering Circular (“Circular”). The Notice and Circular have also been filed on the Corporation’s SEDAR profile atwww.sedar.com. Those shareholders that wish to exercise their Rights must complete and return the Rights Certificate, together with applicable funds, back to Computershare prior to the Expiry Time.
Following the Rights Offering, the Corporation intends to consolidate its issued and outstanding Common Shares, subject to all regulatory approvals and the requisite shareholder approval. The proposed basis for the share consolidation is 1 post-consolidation Common Share for up to every 2 pre-consolidation Common Shares. The Corporation will hold a special meeting of shareholders on July 27, 2022, for the purposes of voting on the share consolidation. Further information about the shareholder meeting will be provided to the Corporation's shareholders in a Notice of Meeting and Management Information Circular which was sent to shareholders on July 8, 2022.
To give an example of a shareholder owning 100,000 pre-consolidation Common Shares: if such shareholder chooses not to exercise their Rights they would own 50,000 post-consolidation Common Shares. However, if such shareholder chooses to exercise all of their Rights, it would cost $1,500 to purchase the additional 100,000 pre-consolidation Common Shares and therefore following the 2-for-1 consolidation, they would own 100,000 post-consolidation Common Shares. Again, as noted above, any shareholder that exercises all of their Rights also has the opportunity to subscribe for additional Common Shares.
Shareholders who own their Common Shares through an intermediary such as a bank, trust Corporation, securities dealer or broker will receive the materials and instructions from their intermediary. Those that wish to exercise their Rights need to do so through their intermediary.
The Rights Offering and proposed share consolidation is being undertaken to maintain the current outstanding share base of the Corporation while acquiring additional funds for future capital expenditures. We believe that having the ability to move forward towards the initiation of commercial production will obviously benefit all shareholders by significantly impacting the market capitalization of the Company.
For those shareholders wishing to participate in the Rights Offering it is important to contact your intermediary as soon as possible, especially if your dealing with a discount broker. Time and persistence is necessary for some brokerages but is necessary to ensure the successful fulfilment of your transaction. If you have any questions or require further explanation on the Rights Offering contact myself or Don Weatherbee our CFO at donw@mineworx.net.
Thank you for your ongoing support, the entire team is working diligently to enter our commercial phase of corporate growth.
Greg Pendura
President and CEO