Strategic Resources Closes Convertible Notes
January 23, 2023
Vancouver, British Columbia – Strategic Resources Inc. (TSXV:SR) (the “Company” or “Strategic”) is pleased to announce it has closed its $500,000 convertible note (the “Notes”) financing announced on December 13, 2022. In addition, the Company has received conditional approval from the TSX Venture Exchange for the issuance of $13.5 million of subscription receipts (the “Receipts”). Collectively, the Notes and Receipts constitute the Offering to support the reverse takeover of BlackRock Metals Inc. (the “Transaction”) announced on December 13, 2022.
The Company has issued $500,000 of convertible, unsecured notes with a coupon rate of 10%. Notes will mature on the earliest of (i) the closing of the Transaction (the “Closing Date”), (ii) that date being six months following the Transaction is terminated, or (iii) 48 months following the date of issuance. The principal and any accrued interest under the Notes are convertible into Shares on the following bases:
(A) in the event that the Company’s Shares remain halted from trading on the Exchange up to and including the Closing Date, the principal under the Notes will automatically convert to Shares upon the Closing Date at $0.50 per Share, and the accrued interest will concurrently, subject to obtaining the prior approval of the Exchange, convert to Shares at $0.50 per Share; or
(B) in the event that the Company’s Shares resume trading on the Exchange prior to the Closing Date, the principal under the Note will automatically convert to Shares upon the Closing Date at $0.50 per Share, and the accrued interest will concurrently, subject to obtaining the prior approval of the Exchange, convert into Shares at a price determined by the Market Price (as defined in Exchange Policy 1.1) as of the Closing Date; or
(C) if the Transaction is not completed, then at any time after termination of the Transaction, the Subscriber may elect to convert (i) any portion of the principal amount of the Note into Shares at the conversion price of $0.35 per Share, and (ii) any accrued interest to the date of conversion, subject to obtaining the prior approval of the Exchange, at a price determined by the Market Price.
Strategic intends to issue 27,000,000 Receipts at $0.50 per Receipt for gross proceeds of $13,500,000. Each Receipt will automatically convert to one common share of the Company on the Closing Date. In the event the Transaction fails to close by March 31, 2023 (or such other date as may be agreed upon), the Receipt proceeds will be returned to investors without interest or deduction. The Company plans to use the net proceeds from the Receipts to advance BlackRock to a construction decision, continue permitting and pre-feasibility study work at Mustavaara, and for general corporate purposes. The Receipts are subject to certain conditions customary for placements of this nature, including approval of the TSXV. Investissement Québec’s participation in the offering of Receipts is subject to final authorizations prior to closing.
All prices are on a pre-consolidated basis. All securities issued in the Offering will be subject to a statutory hold period of four months and one day.
The securities to be offered pursuant to the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Certain officers, directors and other insiders of Strategic may participate in the Receipt Offering. This constitutes a “related party transaction” within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company will rely on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) thereof in respect of related party participation in the Offering as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the Offering, insofar as it involves the related parties, will exceed 25% of the Company’s market capitalization (as determined under MI 61-101).
About Strategic Resources
Strategic Resources Inc. (TSXV:SR) is a Vancouver, Canada-based mineral exploration and development company focused on vanadium projects in Finland. The Company is primarily focused on its flagship Mustavaara vanadium-iron-titanium project in Finland.
Further details are available on the Company’s website at https://strategic-res.com/.
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STRATEGIC RESOURCES INC.
For further information contact:
T: +1 604 646 1890