Ceylon Graphite arranges $3-million private placement

Apr 7, 2022

2022-04-06 16:36 ET – News Release

Mr. Don Baxter reports

CEYLON GRAPHITE ANNOUNCES $3 MILLION PRIVATE PLACEMENT

Ceylon Graphite Corp. intends to complete a private placement pursuant to which it will issue and sell up to 18.75 million units of the company at a price of 16 cents per unit for aggregate gross proceeds of up to $3-million.

Each unit will consist of one common share of the company and one common share purchase warrant. Each warrant will entitle the holder thereof to acquire one share of the company at a price of 25 cents for a period of 36 months following the closing of the offering.

Ceylon intends to use the net proceeds of the offering to advance the corporation’s K1 and M1 mines to commercial production. The company anticipates achieving this milestone within one year of the closing of the offering. Ceylon currently has 10 mining projects, each of which are also expected to have relatively low development capital expenditures which it also intends to bring into commercial production. The high-grade nature of the high-grade vein mineralization is expected to generate high margins even at the current unprocessed graphite price. Ceylon’s underground vein graphite, in Sri Lanka, is high grade (plus 90 per cent Cg), which can directly be shipped for processing into higher value-add material without the need for a mill or a tailings dam. The combination of underground mining and direct shipping ore places Ceylon in an enviable position to operate with zero-carbon footprint to be able to maintain a leading ESG (environmental, social and governance) profile, which is quickly becoming a necessary characteristic to buyers of battery-quality graphite (original equipment manufacturers (OEMs)).

In connection with the offering, the company may pay finders’ fees in cash or securities, or a combination of both, as permitted by the policies of the exchange. PowerOne Capital Markets Ltd. and Primary Capital Inc. will act as finders in connection with the offering.

All securities issued in connection with the offering will be subject to a four-month-and-one-day hold period. The offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals.

Debenture and warrant extension

Concurrent with the offering, the company intends to amend certain terms of the convertible debentures that were issued by the company on May 23, 2018. Ceylon proposes to amend the convertible debentures by extending the maturity date of the convertible debentures by one year from Nov. 23, 2022, to Nov. 23, 2023.

In consideration for the holders of the convertible debentures agreeing to the proposed amendment, the company is proposing to extend the expiry date of the common share purchase warrants issued on May 23, 2018, by one year from Nov. 23, 2022, to Nov. 23, 2023.

The proposed amendments are subject to the approval of the holders of the convertible debentures as well as the TSX Venture Exchange.

All other terms and conditions of the convertible debentures and warrants will remain unchanged.

About Ceylon Graphite Corp.

Ceylon Graphite is a public company listed on the TSX Venture Exchange that is in the business of mining for graphite, and developing and commercializing innovative graphene and graphite applications and products. Graphite mined in Sri Lanka is known to be some of the highest grade in the world and has been confirmed to be suitable to be easily upgradable for a range of applications, including the high-growth electric vehicle and battery storage markets, as well as construction, health care, and paints and coatings sectors. The government of Sri Lanka has granted the company’s wholly owned subsidiary Sarcon Development Pvt. Ltd. an IML Category A licence for its K1 mine and exploration rights in a land package of over 120 square kilometres. These exploration grids (each one square kilometre in area) cover areas of historic graphite production from the early 20th century and represent a majority of the known graphite occurrences in Sri Lanka.

We seek Safe Harbor.

https://www.ceylongraphite.com/