Eric Sprott to invest $2.0 million in Manganese X, shares rise
Manganese X Energy Corp. [MN-TSXV] $2.1 has announced details of a million private placement financing, including a $2.0 million investment by resource financier Eric Sprott.
The shares soared on the news, rising 71.4% or $0.025 to $0.06 after previously trading in a 52-week range of 16 cents and $0.02.
Manganese X aims to become a supplier of high purity (plus 99.9%) battery grade manganese for the production of lithium-ion batteries in the growing electric vehicle, energy storage and steel sectors.
In May, 2022, Manganese X achieved a key milestone by releasing a preliminary economic assessment (PEA) for its Battery Hill Manganese deposit, which is located near Woodstock, New Brunswick.
Manganese X said it intends to complete a non-brokered private placement offering of up to 60 million subscription receipts at a price of $0.035 per receipt to raise gross proceeds of $2.1 million.
The company said it is also pleased to report that Eric Sprott has agreed to subscribe for 57.14 million of the subscription receipts for an investment of $2.0 million. As a result, the financier will become a new control person (as such term is defined in the policies of the TSX Venture Exchange) of the company, subject to the approval of disinterested shareholders of the company. Approval for the creation of a new control person will be sought at a meeting of shareholders, likely in late February or early March, 2025.
Proceeds from the subscription receipts will be placed in escrow on closing of the offering and will be released to Manganese X up receipt of all approvals. The proceeds of the offering will be used primarily to fund Manganese X’s continuing programs to advance the Battery Hill project in New Brunswick towards development, including the upcoming feasibility study.
A portion of the proceeds will also be used for general working capital purposes. As the company is relying on the minimum price exception permitted by the TSXV, which allows the issuance of subscription receipts at less than $0.05 per subscription receipt, the company confirms that none of the proceeds will be used for payments to non-arms length parties of the company nor to persons conducting investor relations activity.
In addition, subject to and upon receipt of all approvals, each subscription receipt will automatically convert into a unit of the company for no additional consideration. Each unit will consist of one common share and one half of one share purchase warrant, each of which shall entitle the holder to acquire an additional share at an exercise price of $0.06 per warrant share for 36 months from the closing date of the offering.
In the event that approvals are not obtained by March 31, 2025, each subscription receipt will be cancelled, and the subscription funds will be returned to subscribers.