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Bonterra completes first tranche of $12.27 million financing

Dec 10, 2020

The net proceeds of the offering will be used to fund drilling campaigns at Bonterra’s Moroy, Gladiator and Barry projects and to prepare a resource estimate update and a Preliminary Economic Assessment (“PEA”) on these three projects and for general working capital purposes.  The PEA is expected to be completed in the fall of 2021.  Along with a total of 124,000 m drilled since the 2019 resource estimates on the Moroy, Gladiator and Barry projects as well as the bulk sample at Moroy, the Company expects these initiatives to help demonstrate the value of the Company’s assets.  

Bonterra Resources Inc. has closed the first tranche of the non-brokered private placement previously announced on November 23, 2020 and December 3, 2020.  In this first tranche, the company raised aggregate gross proceeds of $12,270,375 from the sale of 10,669,891 common shares of the company at a price of $1.15 per Share. 
In connection with the closing of the First Tranche, the Company will pay finder's fees to INFOR Financial Inc. and Cormark Securities Inc., each an arm's length finder, an aggregate of $305,750 in cash.
Certain funds managed by Wexford Capital LP, an insider of the Company, acquired directly or indirectly a total of 4,000,000 Shares in the Offering on the same terms as other participants for an aggregate purchase price of $4,600,000.  The direct and indirect participation in the Offering by an insider of the Company constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”).  The Company is relying on the exemptions from the formal valuation and minority approval requirements in Sections 5.5(a) and 5.7(1)(a) of MI 61-101, on the basis that the fair market value (as determined under MI 61-101) of the related party transactions does not exceed 25% of the Company’s market capitalization.  On November 10, 2020, the Bonterra board of directors created a special committee of independent directors to evaluate strategic alternative transactions, including the Offering.  The special committee oversaw the Offering and approved its terms.  In particular, the special committee reviewed market demand against the Company’s planned 2021 exploration program in approving the increase in the size of the Offering from $10,000,000 to $15,000,000 as announced on December 3, 2020. 

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