Equity-Based Debt Settlement Enhances Defense Metals' Potential
Debt Resolution Through Equity
Defense Metals Corp. (TSXV: DEFN) has made a significant move by settling its debt with Hatch Ltd. through a shares-for-debt settlement agreement. This decision comes in response to outstanding debts concerning engineering services provided to the company.
Details of the Agreement
Settlement Overview
Under this agreement, a total amount of $846,547.31 in unpaid invoices to Hatch will be resolved by issuing 5,290,920 common shares at a set price of $0.16 for each share. Additionally, Hatch will receive 2,645,460 common share purchase warrants. These warrants allow Hatch to buy additional shares at a price of $0.21 for a period of 36 months following their issuance.
Pricing Considerations
The terms of this transaction reflect recent price trends, mirroring previous capital raises while adhering to regulatory limits that prohibit a discount exceeding 25%.
Strategic Partnerships and Projects
Future Collaborations with Hatch
Alongside this debt settlement, a side letter agreement indicates Defense Metals’ intent to collaborate further with Hatch on the full feasibility study for the Wicheeda Rare Earth Element Project. This commitment signifies a strategic move toward utilizing top-tier engineering expertise as the project advances.
Statement from Leadership
Mark Tory, the President and CEO of Defense Metals, expressed his optimism, stating that strengthening ties with Hatch—a well-recognized global engineering firm—highlights their confidence in the Wicheeda Project and its future. Tory looks forward to the partnership in technical studies.
About Defense Metals Corp.
Defense Metals Corp. is dedicated to the development of its wholly owned Wicheeda Rare Earth Element property, covering an expansive area of approximately 11,800 hectares. This block is located on the traditional lands of the McLeod Lake Indian Band and is strategically positioned for access.
Wicheeda Project Overview
The Wicheeda Project is conveniently located around 80 kilometers northeast of Prince George, with access facilitated by well-maintained roads and close proximity to essential infrastructure. The vicinity includes hydro power lines and gas pipelines, along with the Canadian National Railway, providing efficient transport to the nearest port facilities.
Preliminary Feasibility Study Insights
A recent Preliminary Feasibility Study showcased the robust economic potential of the Wicheeda Project, underscoring its viability and significance in the rare earth elements market.
Frequently Asked Questions
What is the nature of the debt settlement between Defense Metals and Hatch?
Defense Metals is resolving a debt of $846,547.31 by issuing shares and warrants to Hatch, a strategic partnership aimed at project advancement.
How does this settlement benefit Defense Metals?
This agreement alleviates financial burdens while maintaining a strong collaboration with an esteemed engineering firm, thereby ensuring support for future project developments.
What projects is Defense Metals currently focused on?
The primary focus is on the Wicheeda Rare Earth Element Project, which is poised for significant development thanks to its promising findings and strategic resources.
What can we expect from the future of the Wicheeda Project?
With strong engineering partnerships and a proven feasibility analysis, the future of the Wicheeda Project appears bright, indicating potential for growth in the rare earth elements sector.
How can investors get more information about Defense Metals?
For additional information, investors can visit Defense Metals’ official website or contact their leadership team directly.
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