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Highlights:
- EMP Metals raises $1.28 million through a non-brokered private placement of 4.27 million shares.
- Tembo Capital strengthens its position as a significant shareholder following its investment.
- Proceeds will be directed towards lithium property development in Saskatchewan and general corporate purposes.
EMP Metals Corp. (CSE: EMPS) (OTCQB: EMPPF) has successfully completed its previously announced non-brokered private placement, issuing 4,266,680 common shares at a price of $0.30 per share, resulting in aggregate gross proceeds of $1,280,004. This financing is a crucial step for the company as it aims to bolster its financial standing and advance its projects in the burgeoning lithium market.
The placement was primarily driven by Tembo Capital Holdings UK Ltd. ("Tembo"), which exercised its right under an investor rights agreement dated October 31, 2023. By acquiring these shares, Tembo has maintained its partially diluted interest just prior to its upcoming issuance of 17,085,000 common shares as part of EMP Metals' acquisition of 25 shares from Hub City Lithium Corp. This strategic move not only reflects Tembo's commitment to EMP Metals but also its confidence in the potential growth of the company's lithium assets.
Due to Tembo’s involvement, this transaction is categorized as a "related party transaction" under Multilateral Instrument 61-101 (MI 61-101). However, EMP Metals relied on exemptions from formal valuation and minority shareholder approval requirements, as Tembo's participation does not exceed 25% of the fair market value of the company’s market capitalization. This legal framework allows EMP Metals to streamline its capital-raising process while adhering to regulatory guidelines.
The funds raised from this private placement are earmarked for development costs associated with EMP Metals' Saskatchewan lithium properties. The lithium market has seen a substantial increase in demand, driven by the electrification of transportation and renewable energy initiatives. By investing in its lithium assets, EMP Metals positions itself to capitalize on this trend while supporting general corporate and working capital needs.
Following the closure of the offering, Tembo’s stake in EMP Metals has notably increased. Before the offering, Tembo held 18,319,000 shares and 13,739,250 share purchase warrants, representing approximately 16.56% of the issued and outstanding shares on a non-diluted basis. After the transaction, Tembo now holds a total of 22,585,680 shares, maintaining approximately 19.66% of the outstanding shares, with potential for increased influence pending shareholder approval that would classify Tembo as a "Control Block Holder."
The securities acquired by Tembo are held for investment purposes, and the company may consider additional acquisitions or disposals in the future based on market conditions and strategic objectives.
As EMP Metals continues to expand its footprint in the lithium sector, the support from significant investors like Tembo highlights the confidence in its operational strategies and growth potential. The company's focus on advancing its Saskatchewan properties aligns with broader trends in the energy market, setting the stage for a promising future.
