Alabama arranges $2.5-million private placement

Jun 18, 2015

ALABAMA GRAPHITE ANNOUNCES BROKERED PRIVATE PLACEMENT

Alabama Graphite Corp. has retained First Republic Capital Corp. to act as its agent in respect of a brokered private placement to raise up to $2.5-million. Under the private placement, First Republic will act as agent on a commercially reasonable efforts basis to sell up to 12.5 million units of the company at a price of 20 cents per unit to raise aggregate proceeds of up to $2.5-million. Each unit is composed of: (i) one common share of the company; and (ii) one-half of one common share purchase warrant of the company, with each whole common share purchase warrant entitling the holder to purchase one additional common share of the company at an exercise price of 35 cents for a period of 36 months from the date of issuance of the units. In the event that the closing price of the company’s common shares on the TSX Venture Exchange (or such other exchange on which the company’s common shares may become traded) is 75 cents or greater per common share during any 20-consecutive-trading-day period at any time subsequent to four months and one day after the closing date, the warrants will expire, at the sole discretion of the company, at 4 p.m. (Vancouver time) on the 30th day after the date on which the company provides notice of such accelerated expiry to the holders of the warrants.

First Republic has also been granted an option to sell up to such number of additional units as is equal to 15 per cent of the units sold under the private placement, which agent’s option is exercisable at any time up to 48 hours prior to closing.

The net proceeds from the sale of the units will be used toward a drilling program on the company’s Coosa and Bama graphite projects in Alabama, United States of America, the preparation of an updated mineral resource estimate for the Coosa project, metallurgical testing both at the Coosa and Bama projects, value-added graphite (including battery/storage applications) and graphene initiatives, and for working capital.

The company has agreed to pay First Republic cash compensation of: (i) a corporate finance fee equal to 2.5 per cent of the gross proceeds of the private placement, and (ii) a sales commission equal to 5 per cent of the gross proceeds of the private placement, and to issue units to First Republic in the following amounts: (i) corporate finance broker units equal to 2.5 per cent of the aggregate number of units sold in the private placement, and (ii) selling compensation broker units equal to 5 per cent of the aggregate number of units sold in the private placement.

All securities issued pursuant to the private placement will be subject to a four-month hold period from the date of closing of the private placement. The private placement is subject to the approval of the TSX Venture Exchange.

http://alabamagraphite.com/news/