On October 19, Ceylon Graphite unveiled plans to raise up to C$4.5 million through a private placing, to accelerate its commercial operations.
In a statement, the miner said it offered an aggregate of 30,163,566 units at a price of $0.0875 per unit for gross proceeds of $2,639,312. The second closing for the balance of the offering is likely to happen around October 28.
Each unit consisted of one share in Ceylon Graphite and one share purchase warrant. Each warrant entitles the holder to acquire one share at an exercise price of $0.15 at any time up until October 22, 2023.
“We are very pleased to have attracted the interest of a new strategic and highly sophisticated investor group,” Ceylon Graphite CEO Bharat Parashar said in a statement.
“The challenge for small-cap mining companies is the initial capital to see it through discovery to production. We are producing and have booked our first sales, making Ceylon Graphite a unique story in the graphite mining and energy storage space globally. Most junior companies raise money on the hopes of reaching production someday. We are already there, and this new investment simply increases our market advantage.”
The company intends to use the net proceeds of the offering to accelerate the commercial production initiated earlier this year at its K1 site, finish development and attain mining licensing approval for its M1 site, advance development of additional sites and for general corporate purposes.
All securities issued are subject to a statutory hold period of four months and one day.
PowerOne Capital Markets Limited and Primary Capital acted as finders and the company said it paid a cash commission of $184,751.84. The cash commission was satisfied through the issuance of 2,111,450 units. In addition, the company issued to the finders 2,111,450 non-transferable broker warrants. Each broker warrant entitles the finders to purchase one unit of Ceylon Graphite at the price of $0.0875 per compensation unit at any time until October 22, 2023.
The company, which was established in 2017, is developing graphite mines in historic resource areas of Sri Lanka.
The company holds a total land package of 121 square kilometres, which contains historic vein graphite deposits, as opposed to flake type graphite deposits.
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