Buchans $2 Million Flow-Through Private Placement

Buchans $2 Million Flow-Through Private Placement

On December 29, 2017, Posted by , With Comments Off on Buchans $2 Million Flow-Through Private Placement

  • Investor Rights Agreement with liquidity and anti-dilution rights
  • Shares issued for debt and management compensation
  • Resignation of Director

Click here to Download the full News Release (PDF).

Toronto, December 29, 2017 – Buchans Resources Limited (“Buchans” or the “Company”) is pleased to report that it has closed a non-brokered, arms-length, private placement financing of flow-through shares for gross proceeds of $2,004,000.

The Company issued 6,680,000 common shares, which qualify as flow-through shares (the “FT Shares”) of the Company for purposes of the Income Tax Act (Canada) at a price of C$0.30 per FT Share, raising aggregate gross proceeds of C$2,004,000 (the “Placement”).

The proceeds of the Placement will be used to incur eligible Canadian Exploration Expenses, as defined under the Income Tax Act (Canada), that will be renounced in favour of the purchasers with an effective date of no later than December 31, 2017.

The funds are intended to be used to explore the Company’s mineral properties in Canada during 2018, including the Lundberg, Daniels Pond and Bobbys Pond properties in central Newfoundland.

Relating to the Placement, the subscribers have entered into resale agreements with Delbrook Capital Advisors Inc. (“Delbrook”), which will result in all FT Shares being acquired by Delbrook on behalf of the Delbrook Resource Opportunities Fund and Delbrook Resource Opportunities Master Fund LP. Delbrook acts as investment manager to both Funds.

Buchans has entered into an Investor Rights Agreement with Delbrook to provide certain liquidity and anti-dilution rights. If the Company’s shares have not been listed on a recognized stock exchange by June 30, 2018, (subject to extension to September 30, 2018 in certain circumstances) the Funds shall be issued an additional 0.10 of a share for each Placement share at no additional cost and similarly at the end of each successive quarterly interim period after June 30, 2018.

Delbrook Capital Advisors Inc. is an independent investment manager which focuses on alternative strategies. Delbrook Capital Advisors Inc. manages the Delbrook Resource Opportunities Fund and Delbrook Resource Opportunities (Master) LP, both alternative investment funds, focused on identifying and investing in opportunities within the metals and mining sector.

The Company has agreed to pay an advisory fee of $100,000 to Desjardins Securities Inc. and to issue to Desjardins broker warrants entitling the holder to purchase 334,000 common shares, at an exercise price of $0.30 per share, for a period of one year, expiring December 29, 2018.

Issue of Shares to Insiders


Buchans also reports that the Company has settled and discharged a total $160,000 of outstanding liabilities through the issue of a total of 533,334 shares valued at $0.30 per share.

416,667 shares were issued to Terence McKillen, a director of the Company, in settlement of a liability of $125,000 and 116,667 shares were issued to a company controlled by Danesh Varma, a director of the Company, in settlement of a liability of $35,000. The shares for debt settlements were approved by an independent committee of the Board.

Buchans also reports that the Board of Directors has approved the issue of 833,333 shares valued at $0.30 per share, to John Kearney, Chairman and Chief Executive, as compensation for management services. The compensation, payable in shares, was approved on the recommendation of a special independent committee recognizing the successful completion of several transactions, including the scheme of arrangement with Dalradian and the demerger and spin out of the Company to former Minco shareholders.

Retirement of Director


Buchans Resources also reports that Warren MacLeod has resigned as a director of the Company.

Warren had served as a Director and President of the Company’s subsidiary Buchans Minerals Corporation and its predecessor companies since 2006 and was substantially responsible for assembling and advancing the Company’s Newfoundland base metals properties and its New
Brunswick manganese project.

John Kearney, Chairman and Chief Executive, stated “The Board of Directors acknowledges and appreciates the work and contribution of Warren MacLeod over many years and extends its best wishes on his future endeavours”.

ABOUT BUCHANS RESOURCES


Buchans Resources Limited was incorporated on May 8, 2015 under the laws of the Province of Ontario, Canada. Buchans has interests in exploration and evaluation properties located in Canada, Ireland and the United Kingdom.

Buchans also holds an approximate 26% shareholding in Xtierra Inc., (TSXV:“XAG”), which holds mineral properties in Mexico and approximately 2.3 million shares in Dalradian Resources Inc. (TSX:“DNA”) which is developing the Curraghinalt gold deposit in Ireland.

Following completion of the Placement and issue of shares disclosed above, Buchans Resources Limited will have 55,860,718 common shares issued and outstanding.


Enquiries:       info@buchanslimited.com

John F. Kearney: Chairman & Chief Executive                                          +1 416 362 6686

Danesh Varma:    Chief Financial Officer                                             +44 (0) 207 653 9881

Peter McParland:  Director – Ireland                                                     +353 (0) 46 907 3709


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www.buchansresources.com

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