In addition, prior to the completion of the offering, the company said it will complete a two for one (2:1) common share consolidation of all of its outstanding securities.
In a statement, Gatling said there are currently 62,031,340 common shares issued and outstanding. Upon completion of the consolidation, there will be about 31,015,670 shares issued and outstanding.
The company said the offering will consist of a combination of 5,454,545 post-consolidated shares issued on a flow-through basis (FT shares) at $0.55 each and 4 million units at $0.50 apiece.
Each unit will consist of one post-consolidated common share and one-half of one transferable share purchase warrant, exercisable into one additional post-consolidated common share at $0.70 each. The warrants will be exercisable for two years from the date of issue.
In connection with the offering, the agents led by Sprott Capital Markets LP will be entitled to a cash fee in an amount equal to 6% of the gross proceeds. The company also will grant the agents common share purchase warrants entitling them to subscribe for that number of common shares equal to 6% of the aggregate number of units placed and 5% of the aggregate number of FT shares placed. Subject to regulatory approval, each broker warrant will be exercisable to acquire one common share at $0.70 each for a period of 24 months after the closing date.
The gross proceeds will be used for Canadian exploration expenses, and will qualify as "flow-through mining expenditures,” which will be renounced to the subscribers with an effective date no later than December 31, 2020.