Scandium Canada upsizes bought deal offering to $15 million
Scandium Canada Ltd. [SCD-TSXV] said it has elected to increase the size of a previously announced bought deal offering, that is now expected to raise $15 million. That’s up from an earlier $10 million target.
The announcement comes just 48 hours after the company said it has signed a non-refundable contribution agreement of up to $6.9 million under Natural Resources Canada’s Global Partnership initiative (GPI) for the company’s Crater Lake scandium and rare earth elements project in Quebec and its aluminum-scandium alloys subsidiary. The agreement was announced at the PDAC mining conference in Toronto.
The offering is expected to consist of 68.2 million units priced at 22 cents per unit. Each unit will consist of one common share and one share purchase warrant, each of which entitles the holder to acquire one common share at a price per warrant share of 30 cents for 30 months from closing.
The company has agreed to grant the underwriters an option to sell up to an additional 10.2 million units on the same terms, potentially generating additional proceeds of $2.25 million. That option can be exercised in full or in part for up to 48 hours prior to closing.
On Wednesday, Scandium Canada shares eased 12.7% or $0.03 to 20.5 cents. The shares trade in a 52-week range of 36 cents and $0.015.
Scandium Canada is aiming to become a leading source of scandium via the development and commercialization of aluminum-scandium alloys and the development of its Crater Lake mining project.
Scandium is a strategically important metal that is essential for high-performance aluminium alloys, solid oxide fuel cells and a range of new and emerging technologies.
In Canada, scandium’s importance recently was underlined when the Canadian government officially designated certain critical minerals as a national security priority under the Defence Production Act. This would allow the federal government to support the mining industry by guaranteeing it a buyer and a minimum price.
Scandium, one of 17 metallic (one of two non lanthanides in the rare earth basket) elements called rare earths, is used as an alloy to strengthen aluminum for automotive and aerospace components and is a critical component for chips used in smartphones to enable radio-frequency selection. It is also used in hydrogen fuel cell technology, as the metal improves electrical conductivity.
Commenting on the GPI contribution announced at PDAC, the company said it represents 69% of the Crater Lake project costs presented and will be used to scale up the company’s patent-pending processes for the benefication, extraction, and purification of scandium and rare earth elements through mineral processing test work and by progressing to FEL-3 engineering standards, completing detailed design and specifications, and developing a comprehensive cost estimate and execution schedule. Additionally, the project will carry out applied research with end users to optimize aluminum-scandium alloy products.