Ucore Closes Fully-Subscribed Private Placement of Convertible Debentures

Halifax, Nova Scotia — May 29, 2020 — Ucore Rare Metals Inc. (“Ucore” or the “Company”) (TSXV:UCU) (OTCQX:UURAF) is pleased to announce that further to its previous announcements, the Company has closed the second and final tranche (the “Second Tranche”) of its non-brokered private placement (the “Financing”) of unsecured convertible debentures (“Convertible Debentures”). Pursuant to the Second Tranche, Ucore issued 1,520 Convertible Debentures at a price of $1,000 per debenture for aggregate gross proceeds of $1.52 million which, when combined with the first tranche, resulted in a total of $2.8 million being raised through the issuance of 2,800 Convertible Debentures.

The Convertible Debentures bear interest at a rate of 7.5%, payable semi-annually on the last day of May and November of each year, commencing on November 30, 2020, and have a three-year term (the “Term”), with the principal amount being due to be repaid in full by the Company on May 31, 2023 (the “Maturity Date”).

In addition to annual interest at a rate of 7.5%, the Company paid to each initial holder of Convertible Debentures a one-time commitment fee comprised of 500 commitment warrants (“Commitment Warrants”) per Convertible Debenture. Each Commitment Warrant entitles its holder to acquire one common share of the Company (a “Common Share”) at an exercise price of $0.18 per Common Share for a period of 24 months.

At any time during the Term, a holder of Convertible Debentures may elect to convert the outstanding net principal amount, or any portion thereof, into units (“Units”) at a conversion price of $0.12 per Unit (the “Conversion Price”). Each Unit shall consist of one Common Share and one-half of a warrant (“Warrant”), with each whole Warrant entitling the holder to acquire a Common Share at an exercise price of $0.18 for a period ending on the Maturity Date.

The outstanding principal amount of each Convertible Debenture will automatically be converted into Units at the Conversion Price ($0.12) if the Common Shares trade at a closing price of $0.22 or more on the TSX Venture Exchange (the “TSXV”) for 20 consecutive trading days. During the third year of the Term, the Company shall have the option to extend the Term by up to one additional year. If extended, then the Company shall pay a cash extension fee to the holders of Convertible Debentures in the amount of six month’s interest.

The Company anticipates that it will use the net proceeds from the Financing for the continuing development of RapidSX™ for use in the processing of rare earth minerals (“REEs”), nickel (“Ni”), cobalt (“Co”), lithium (“Li”) and other technology metals.

The issuance of the Convertible Debentures and the Commitment Warrants pursuant to the Financing were (and, if applicable, the Units and any underlying Common Shares and Warrants shall be) completed on a private placement and prospectus exempt basis, as applicable, such that the issuances are (or in the case of the Units and any underlying Common Shares and Warrants, shall be) exempt from any applicable prospectus and securities registration requirements. No finder’s fees or commissions were paid in connection with the Financing, which remains subject to the final approval of the TSXV.

Pursuant to National Instrument 45-102 – Resale of Securities, all of the Convertible Debentures and Commitment Warrants issued pursuant to the Financing (and any underlying Units, Common Shares or Warrants to be issued upon conversion or exchange of these securities) are subject to a four-month hold period, expiring on September 22, 2020 and September 30, 2020, respectively. Additional hold periods and/or trading or resale restrictions may also apply in the United States.

Certain officers, directors and other insiders of Ucore subscribed for a total of 635 Convertible Debentures for aggregate gross proceeds to the Company of $635,000, pursuant to the Second Tranche, which is considered a related party transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Full details of these transactions will be available on the System for Electronic Disclosure by Insiders (SEDI), available at: http://www.sedi.ca. The Financing is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of the Financing, nor the consideration paid, exceed 25% of the Company’s market capitalization. No new insiders or control persons were created in connection with the closing of the Financing.

The Financing was approved by all of the independent directors of the Company. The number of Common Shares potentially issuable to insiders of the Company pursuant to the Financing (including any Common Shares issuable upon the conversion of the Convertible Debentures into Units, and the exercise of the Commitment Warrants and the Warrants) represents not more than 10% of the Company’s currently issued and outstanding Common Shares on a non-diluted basis.

Leave a Reply