October 19, 2020 / Vancouver, BC / NRG Metals Inc. (“NRG” or the “Company”) (TSX-V: NGZ) (OTCQB: NRGMF) (Frankfurt OGPN), announces a private placement (the “Private Placement”) of up to 8,000,000 units (the “Units”) at a price of $0.22.5 per Unit for gross proceeds of up to $1,800,000. Each Unit will be comprised of one common share (the “Shares”) and one transferable common share purchase warrant (the “Warrants”). Each Warrant will allow the holder to purchase one Share of the Company at a price of $0.35 per Share for a period of five years from the date of closing of the Private Placement.
The Private Placement will be open to all existing shareholders of the Company and interested parties who can rely upon an exemption from the registration and prospectus requirements of applicable securities laws to participate. The Warrants are subject to, at the option of the Company, an expiry acceleration provision whereby if the Company’s Shares close at or above $ 0.40 per Share for more than 10 consecutive trading days, the holder will have 30 days from that date to exercise the Warrant or it will expire. A finder’s fee of 8% cash and 8% warrants is payable in connection with this transaction.
All securities issued will be subject to a four month hold period.
Proceeds of the Private Placement will be used to advance the HMN Lithium Project, located in Salta Province, Argentina. The project is located on the Hombre Muerto Salar, the premier lithium producing salar in Argentina. The property is adjacent to land under development by Korean multinational corporation POSCO, who acquired their ground from Galaxy Resources Ltd. for $ US 280 million. The Company completed a Preliminary Economic Assessment of the HMN Li Project in 2019, and the property has two pumping wells installed. The next phase of development will include moving the project to a pre-feasibility. In addition, NRG is evaluating several new extraction technologies for lithium production which may be applicable to the project.
To better reflect the current direction of the Company, subject to regulatory approval, the Company will change its name to Lithium South Development Corporation (Lithium South). The name change will become effective prior to closing of the above private placement funding.
On behalf of the board of directors of NRG Metals Inc.:
Adrian F. C. Hobkirk
President and Chief Executive Officer
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The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements.
This news release does not constitute an offer for sale of securities for sale, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.