Sun Summit Minerals Corp. (TSXV: SMN and OTCQB: SMREF) is pleased to announce that it has closed its previously announced brokered private placement for gross proceeds of C$ 4,000,000. Due to strong demand, the co-lead agents and joint bookrunners, Red Cloud Securities Inc. and Eventus Capital Corp. (collectively, the “Agents”), fully exercised their option to increase the total gross proceeds of the Offering to C$5,000,000.
Under the Offering, the Company sold 4,217,607 flow-through units (the “FT Units”) at a price of C$0.66 per FT Unit and 2,736,271 flow-through units to charitable purchasers (the “Charity FT Units”) at a price of C$0.81 per Charity FT Unit.
Each FT Unit and Charity FT Unit consisted of one common share of the Company issued as a “flow-through share” under the Income Tax Act (Canada) (each, a “FT Share”) and one-half of one common share purchase warrant, Each whole warrant (a “Warrant”) entitles the holder to purchase one (non-flow-through) common share of the Company (each, a “Warrant Share”) at a price of C$0.90 until July 31, 2023. The FT Shares and Warrant Shares have a hold period ending on November 30, 2021.
The Company intends to use the proceeds raised from the Offering for the exploration of the Company’s Buck Property and other Canadian properties it may acquire. The gross proceeds from the issuance of the FT Shares will be used for “Canadian Exploration Expenses” under the Income Tax Act (Canada) (the “Qualifying Expenditures”), which will be renounced with an effective date no later than December 31, 2021 to the purchasers of the FT Units and Charity FT Units in an aggregate amount not less than the gross proceeds raised from the issue of the FT Shares. If the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will indemnify each purchaser of FT Units and Charity FT Units for any additional taxes payable by such purchaser as a result of the Company’s failure to renounce the Qualifying Expenditures.
Under the Offering, the Company paid the Agents total cash commissions of C$ 269,629 and issued to the Agents 371,036 warrants to purchase common shares of the Company (the “Broker Warrants”) of which 207,838 Broker Warrants have an exercise price of C$ 0.66 per Warrant Share and 163,198 Broker Warrants have an exercise price of C$ 0.81 per Warrant Share. Each Broker Warrant is exercisable to acquire one Warrant Share until July 29, 2023.