Rock Tech Lithium Inc. (TSX-V: RCK) (OTCQX: RCKTF) (FWB: RJIB) (WKN: A1XF0V) (the "Company" or "Rock Tech") is pleased to announce that it intends to undertake a proposed brokered offering (the "Offering") of up to approximately 9.5 million units of Rock Tech ("Units"), on a private placement basis, to certain U.S. and international investors at a price of U.S.$4.20 per Unit (or approximately C$5.42; based on the C$/U.S.$ exchange of $1.2895 as of December 17, 2021), for aggregate gross proceeds of up to approximately U.S.$40 million (or approximately C$51.9 million)1. Each Unit will consist of one common share in the capital of Rock Tech (the "Common Shares" and such Common Shares proposed for issue and sale, the "Unit Shares") and one common share purchase warrant of Rock Tech (a "Warrant", and together with the Units and the Unit Shares, the "Securities"). Each Warrant will entitle the holder thereof to purchase one Common Share (a "Warrant Share") at an exercise price of C$6.77 per Warrant Share for a period of 30 months following the date of issuance of such Warrant, subject to and in accordance with the terms and conditions of the certificate evidencing such Warrant, including acceleration and adjustment in certain circumstances.
Rock Tech intends to use the proceeds of the Offering as follows:
• approximately U.S.$31.5 million to finance the construction of the Company's proposed high grade lithium hydroxide converter and refinery facility in Guben, Germany (the "Converter Project"), including funding the procurement of long lead items such as pyro-kilns and crystallizers, general Converter Project costs and management and human resources costs (see the Company's press release dated November 29, 2021 for details regarding the estimated capital and operating costs of the Converter Project);
• approximately U.S.$5.8 million to finance the continued exploration and development of the Company's Georgia Lake lithium project in Ontario, Canada (the "Georgia Lake Project"), including funding the Company's exploration drilling programs, engineering work, environmental and permitting costs, community relations spending, project infrastructure spending and management and human resources costs; and
• the balance to pay expenses incurred by the Company in connection with the Offering and for general corporate purposes.
Closing of the Offering is expected to occur on or about December 30, 2021, subject to the satisfaction of certain customary closing conditions, including the approval of the TSX Venture Exchange (the "TSX-V") in respect of the listing on the TSX-V of the Unit Shares issued pursuant to the Offering and the Warrant Shares issuable on exercise of the Warrants.
The Unit Shares and the Warrants will be subject to four month hold periods in accordance with applicable Canadian securities laws as well as the rules of the TSX-V, as will any Warrant Shares issued on exercise of Warrants prior to the expiry of such hold periods.
The Securities offered pursuant to the Offering 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 of any state of the United States and accordingly may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities laws or pursuant to exemptions therefrom.
Evercore Group L.L.C. participated in the Offering as placement agent for the sale of the Securities on a private placement basis outside of Canada with only investors outside of Canada eligible to participate in the Offering. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company.
Existing Shareholder and Insider Participation
Existing Company shareholders, including an insider of Rock Tech, intend to subscribe for over half of the Units offered pursuant to the Offering. The issuance of Units to such insider pursuant to the Offering would constitute a "related party transaction" under applicable Canadian securities laws, including Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. However, the Company expects that such insider participation will be exempt from the formal valuation and minority shareholder approval requirements under applicable Canadian securities laws, based on a determination that neither the fair market value of the Units expected to be subscribed for by such insider, nor the consideration for the Units expected to be paid for by such insider, will exceed 25% of Rock Tech's market capitalization.
The Company expects to file a material change report in connection with the Offering less than 21 days before the expected closing date of the Offering, which the Company deems reasonable in the circumstances, as the details of the Offering, including the potential insider participation therein, were not confirmed at that time and the Company wishes to close the Offering on an expedited basis.
For further information, please contact:
Head of Public Relations
Rock Tech Lithium Inc.
777 Hornby Street, Suite 600
Vancouver, B.C., V6Z 1S4
Telephone: (778) 358-5200
Facsimile: (604) 670-0033