Calgary, Alberta – Athabasca Minerals Inc. (“AMI” or the “Corporation”) – TSXV: AMI – is pleased to announce a non-brokered private placement (the “Private Placement”) of $1,480,000 based on the issuance of 9,866,668 common shares (the “Common Shares”) at a premium price of $0.15 per Common Share.
- The Private Placement, priced at $0.15/share, represents a 30% premium to the market’s last closing price of AMI, with no finders-fee payable.
- The Private Placement is anchored by JMAC Resources Ltd. (“JMAC”) as lead investor, where Mr. Jon McCreary, CEO of JMAC, is also appointed to AMI’s Board of Directors.
- Insider ownership of the Corporation’s Common Shares has increased to 22.5% (from previously 8.1%) based on contributions from officers, existing Board Directors, and recognizing Mr. McCreary’s new Board appointment.
- Proceeds from the Private Placement will be primarily used to advance Front-End Engineering & Development (“FEED”) activities for the Duvernay Sand Project (“Duvernay Project”) and for general corporate purposes.
- Turn-key Processing Solutions (“TPS”), the design-build contractor currently conducting the FEED for the Duvernay Project, is also participating in the Private Placement.
MERITS OF THE PRIVATE PLACEMENT
The Duvernay Project, which resides under the Corporation’s wholly-owned subsidiary, AMI Silica Inc., is making meaningful progress with FEED, on what aims to be one of the greenest sand processing operations in North America, in conjunction with its international industrial partner. As project activities ramp up toward Final Investment Decision (“FID”), planned in 1H-2021, this Private Placement primarily supports AMI’s contribution to associated FEED expenditures, and to a lesser extent for general corporate purposes.
JMAC, the Canadian affiliate of JMAC Resources Inc. in the United States, has subscribed to receive 6,666,667 Common Shares based on gross proceeds of $1,000,000, pursuant to the terms of a subscription agreement.
At closing of the Private Placement, JMAC’s ownership of AMI’s outstanding Common Shares will represent a 13.5% stake in the Corporation.
The Private Placement is further supported by TPS, an experienced design-build contractor headquartered in Franklin, Tennessee, with extensive background in engineering, constructing, and operating numerous silica production facilities in North America totaling over 30 million tons in annual capacity.
Current insiders of the Corporation (not including Mr. McCreary’s interest on behalf of JMAC) collectively subscribed to receiving 1,316,668 Common Shares based on gross proceeds of $197,500 pursuant to the terms of a subscription agreement. Participation by the Insiders in the Private Placement was considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”).
The Corporation was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Insiders’ participation in the Private Placement in reliance of sections 5.5(a) and 5.7(1)(a) of MI 61-101. A material change report was filed in connection with the participation of Insiders in the Private Placement less than 21 days in advance of the closing of the Private Placement, which the Corporation deemed reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the Private Placement in an expeditious manner.
All securities issued in connection with the Private Placement will be subject to a statutory four-month and one-day hold period under applicable Canadian securities laws. The Private Placement remains subject to receipt of all necessary regulatory and other approvals, including the final approval of the TSX Venture Exchange.
Any securities issued have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Mark Smith, the Corporation’s Chief Financial Officer, stated: “We are pleased with the results of the Private Placement initiative. The strong support and response to achieve $1.48 million financing at a 30% premium to the previous day market closing price for AMI stock recognizes the merits of the Corporation’s strategic initiatives. With this capital investment, Athabasca is well-positioned to advance the FEED toward FID for the Duvernay Project with a solid balance sheet.”
Board Appointment (Mr. Jon McCreary)
The Corporation is additionally pleased to announce that Mr. Jon McCreary, CEO of JMAC Resources Inc, and its affiliate JMAC Resources Ltd in Canada, will be joining AMI’s Board as an independent Director effective November 1, 2020.
Robert Beekhuizen, AMI’s Chief Executive Officer, stated: “We are excited to have Mr. McCreary joining Athabasca’s Board at a pivotal stage in the Corporation’s delivery on its strategic plan. Mr. McCreary has proven industry experience in successfully building JMAC Resources Inc. in the United States into a strong company with many synergies and overlapping interests relevant to AMI’s business model. We look forward to his role on the Board as we continue to expand and grow AMI’s business interests in the North American marketplace.”
About Athabasca Minerals Inc.
Athabasca is an integrated group of companies focused on the aggregates, industrial minerals, and resource sectors, including exploration and development; aggregates marketing, and midstream supply-logistics solutions. Business activities include aggregate production, sales and royalties from corporate-owned pits, management services of third-party pits, acquisitions of sand and gravel operations, integrated supply/delivery solutions of industrial minerals, and new venture development.
The Corporation is strategically focused on growing its three core business units: the AMI Aggregates division, the AMI RockChain division, and the AMI Silica division. Management is continually pursuing opportunities for sustained growth and diversification in supplying aggregate products and industrial minerals.
Athabasca’s business is comprised of the following three reportable segments:
- AMI Aggregates division produces and sells aggregate out of its corporate pits and manages the Coffey Lake Public Pit on behalf of the Province of Alberta for which aggregate management services revenue are earned.
- AMI Silica division is positioning to become a leading supplier of premium domestic silica sand with regional deposits in Alberta and NE British Columbia. This reporting segment encompasses all silica assets including Firebag, the Duvernay Project, and the Montney In-Basin Project.
- AMI RockChain division is a midstream technology-based business using its proprietary RockChain™ digital platform, associated algorithm, and quality assurance & control services to provide cost-effective integrated supply/delivery solutions of industrial minerals to industry, and the construction sector.
- TerraShift Engineering Ltd. is a newly acquired entity of RockChain. It offers technology-based applications that support resource exploration and development, environmental and regulatory engineering, resource management, compliance reporting, and reclamation for a growing customer base across Western Canada and Ontario.
For further information, please contact:
- Tanya Finney, Director, Investor and Stakeholder Relations
Tel: 587-391-0548 / Email: email@example.com