Ceylon Graphite Corp. (CYL) has upsized its private placement for gross proceeds of up to $3,500,000 to advance graphite production at its K1 and M1 mines.
Ceylon Graphite Corp. announces that it has closed a private placement of 21,875,000 units for $0.16 per unit for gross proceeds of $3,500,000. Each unit consists of one common share in the capital of the company and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one common share of the company for $0.25 per warrant share at any time until 10 May 2025.
Ceylon intends to use the net proceeds of the offering to advance the company’s K1 and M1 mines to commercial production. The company anticipates achieving this milestone within one year of the closing of the offering.
Graphite mining projects
Ceylon currently has ten low-CAPEX mining projects at the development stage, allowing for scalable production. The high-grade nature of the graphite vein mineralisation is expected to generate high margins at the current un-processed graphite price. Ceylon’s underground vein graphite, in Sri Lanka, is high grade (+90% Cg), which can be directly shipped for processing into higher value-added material without the need for a mill or a tailings dam.
The combination of underground mining and direct shipping graphite allows Ceylon to operate with zero carbon footprint to be able to maintain a leading ESG profile, which has become a necessary characteristic for buyers of battery-quality graphite (Original Equipment Manufacturers (OEMs)).
“I am extremely grateful for the support of our strategic shareholders. I am looking forward to getting two mines producing graphite in the very near term,” stated Ceylon CEO, Don Baxter. “In the meantime, we continue our conversations with OEMs regarding their battery graphite supply requirements. We are witnessing a sea of change in attitudes from OEMs as they realise the necessity for the supply of critical input materials to feed the battery factories they are announcing.”
In connection with the offering, a 7.5% cash finder’s fee was paid together with the issuance of finder warrants equal to 7.5% of the total number of units placed, each exercisable for one unit for $0.16 at any time until 10 May 2025. All securities issued under the offering are subject to a statutory hold period of four months and one day. PowerOne Capital Markets Limited and Primary Capital Inc. acted as finders in connection with the offering.
The securities being offered have not been, nor will they be registered under the United States Securities Act of 1933, as amended, or state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, US persons absent US federal and state registration or an applicable exemption from the US registration requirements. This release does not constitute an offer for the sale of securities in the United States.
Approval to amend debentures and warrants
Further to its press release of April 6, 2022, Ceylon has received TSX Venture approval to amend certain terms of the convertible debenture that were issued by the company on 23 May 2018 and the common share purchase warrants issued in connection with the convertible debentures. Under the terms of the amendment, the maturity date of the convertible debentures has been extended by one year from 23 November 2022 to 23 November 2023, and the expiry date of the warrants has been amended so that the warrants will expire on 23 May 2023.
About Ceylon Graphite Corp: Advancing graphite production
Ceylon Graphite is a public company listed on the TSX Venture Exchange, which is in the business of mining graphite and developing and commercialising innovative graphene and graphite applications and products. Graphite mined in Sri Lanka is known to be some of the highest grades 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, healthcare 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 license for its K1 mine and exploration rights in a land package of over 120km². This licence is currently being renewed. These exploration grids (each one square kilometre in area) cover areas of historic graphite production from the early twentieth century and represent a majority of the known graphite occurrences in Sri Lanka.
FORWARD LOOKING STATEMENTS:
This news release contains forward-looking information as such term is defined in applicable securities laws, which relate to future events or future performance and reflect management’s current expectations and assumptions. The forward-looking information includes statements about Ceylon’s plans to commence mining operations. Such forward-looking statements reflect management’s current beliefs and are based on assumptions made by and information currently available to Ceylon, including the assumption that, there will be no material adverse change in metal prices, all necessary consents, licenses, permits and approvals will be obtained, including various local government licenses and the market. Investors are cautioned that these forward-looking statements are neither promises nor guarantees and are subject to risks and uncertainties that may cause future results to differ materially from those expected. Risk factors that could cause actual results to differ materially from the results expressed or implied by the forward-looking information include, among other things, a failure to obtain or delays in obtaining the required regulatory licenses, permits, approvals and consents, an inability to access financing as needed, a general economic downturn, a volatile stock price, labour strikes, political unrest, changes in the mining regulatory regime governing Ceylon, a failure to comply with environmental regulations and a weakening of market and industry reliance on high quality graphite. Ceylon cautions the reader that the above list of risk factors is not exhaustive.
