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MONTREAL, April 10, 2018 /CNW/ - Critical Elements
Corporation (the "Company" or "Critical Elements") (TSX-V:
CRE) (US OTCQX: CRECF) (FSE: F12) is pleased to announce it has
entered into an agreement with a syndicate of underwriters led by
Canaccord Genuity Corp. (collectively, the "Underwriters") pursuant
to which they have agreed to purchase, on a bought deal private
placement basis, 5,000,000 units (the "Units") of the Company at a
price of C$1.00 per Unit for gross
proceeds of C$5,000,000 (the
"Offering").
Each Unit consists of one common share (a "Unit Share") of
Critical Elements and one-half of one common share purchase warrant
(each whole common share purchase warrant, a "Warrant") of Critical
Elements. Each full Warrant will entitle the holder thereof to
purchase one common share of the Company (the "Common Share") at a
price of C$1.25 per Common Share, for
a period of 24 months following the closing date and include an
acceleration provision if the closing price of the common shares is
greater than C$2.00 per share for at
least 20 consecutive trading days.
The Company has agreed to grant to the Underwriters an option to
sell up to an additional 2,000,000 Units of the Company on the same
terms and conditions as the Offering, exercisable at any time up to
48 hours prior to the closing of the Underwritten Offering. The net
proceeds of the Offering will be used to advance the Rose
Lithium-Tantalum project, as well as for working capital and
general corporate purposes.
"Despite more subdued overall battery materials equity market
conditions, the Company is pleased to have arranged this offering.
These funds will allow us to advance development of the Rose
Lithium-Tantalum Project, including funding permitting activities.
We anticipate that these funds should provide Critical Elements
with sufficient capital for 2018" stated Jean-Sébastien Lavallée,
President and Chief Executive Officer.
The Units will be issued on a private placement basis in certain
provinces of Canada, in each case,
pursuant to applicable exemptions from the prospectus requirements
under applicable securities laws.
The Offering is scheduled to close on or about May 1, 2018 and is subject to certain conditions
including, but not limited to, the receipt of all necessary
regulatory and other approvals including the approval of the TSX
Venture Exchange and the securities regulatory authorities. The
securities issued under the Offering will be subject to a hold
period of four months from the applicable closing date.
The securities being offered will not be registered under
the United States Securities
Act of 1933, as amended and may not be offered or sold within
the United States absent
registration or an exemption from the registration requirements.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States.
ABOUT CRITICAL ELEMENTS CORPORATION
The Company recently released a financial analysis for Critical
Elements' wholly-owned Rose Lithium-Tantalum project (Rose
Lithium-Tantalum project feasibility study, WSP, October 20, 2017), which is based on price
forecasts of US $750/tonne for
chemical-grade lithium concentrate (5% Li2O), US
$1,500/tonne for technical-grade
lithium concentrate (6% Li2O) and US $130/kg for Ta2O5 in
tantalite concentrate, and an exchange rate of US $0.75/CA $. The internal rate of return
("IRR") for the Rose Lithium-Tantalum project is estimated at 34.9%
after tax, and net present value ("NPV") is estimated at CA
$726 million at an 8% discount rate.
The estimated payback period is 2.8 years. The pre-tax IRR for the
Rose Lithium-Tantalum Project is estimated at 48.2% and the pre-tax
NPV at CA $1,257 million at an 8%
discount rate (see press release dated September 6, 2017). The financial analysis is
based on the Indicated mineral resource. An Indicated mineral
resource is that part of a mineral resource for which quantity,
grade or quality, densities, shape and physical characteristics can
be estimated with a level of confidence sufficient to allow the
appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of
the deposit.
The life-of-mine (LOM) plan provides for the extraction of 26.8
million tonnes of ore, 182.4 million tonnes of waste, and 11.0
million tonnes of overburden for a total of 220.2 million tonnes of
material. The average stripping ratio is 7.2 tonnes per tonne
of ore. The nominal production rate is estimated at 4,600 tonnes
per day, with 350 operating days per year. The open pit mining
schedule allows for a 17-year mine life.
The mine will produce a total of 26.8 million tonnes of ore
grading an average of 0.85% Li2O and 133 ppm
Ta2O5, including dilution. The mill will
process 1.61 million tonnes of ore per year to produce an annual
average of 236,532 tonnes of technical- and chemical-grade
spodumene concentrate and 429 tonnes of tantalite concentrate.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
STATEMENTS
This news release contains "forward-looking information" within
the meaning of Canadian Securities legislation. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "scheduled", "anticipates",
"expects" or "does not expect", "is expected", "scheduled",
"targeted", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking information contained herein include, without
limitation, statements relating to mineral reserve estimates,
mineral resource estimates, realization of mineral reserve and
resource estimates, capital and operating costs estimates, the
timing and amount of future production, costs of production,
success of mining operations, the ranking of the project in terms
of cash cost and production, permitting, economic return estimates,
power and storage facilities, life of mine, social, community and
environmental impacts, lithium and tantalum markets and sales
prices, off-take agreements and purchasers for the Company's
products, environmental assessment and permitting, securing
sufficient financing on acceptable terms, opportunities for short
and long term optimization of the Project, and continued positive
discussions and relationships with local communities and
stakeholders. Forward-looking information is based on assumptions
management believes to be reasonable at the time such statements
are made. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
information.
Although Critical Elements has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. Factors that may cause actual results to differ
materially from expected results described in forward-looking
information include, but are not limited to: Critical Elements'
ability to secure sufficient financing to advance and complete the
Project, uncertainties associated with the Company's resource and
reserve estimates, uncertainties regarding global supply and demand
for lithium and tantalum and market and sales prices, uncertainties
associated with securing off-take agreements and customer
contracts, uncertainties with respect to social, community and
environmental impacts, uncertainties with respect to optimization
opportunities for the Project, as well as those risk factors set
out in the Company's year-end Management Discussion and Analysis
dated August 31, 2016 and other
disclosure documents available under the Company's SEDAR profile.
Forward-looking information contained herein is made as of the date
of this news release and Critical Elements disclaims any obligation
to update any forward-looking information, whether as a result of
new information, future events or results or otherwise, except as
required by applicable securities laws.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is described in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Critical Elements Corporation