In addition, immediately prior to the closing of the RTO: (i) 778 issued Consolidated 778 Shares to certain subscribers at a price of $2.60 per share for total gross proceeds of $8,249,997.60 (the “778 Non-Brokered Common Share Offering”); and (ii) Minto Explorations issued Consolidated Minto Shares, issued as “flow-through shares” as defined in subsection 66(15) of the Canada Income Tax Act, at a price of $2.60 per Minto Flow-Through Share for total gross proceeds of $6,395,755.60, subject to the terms and conditions of the Agency Agreement (the “Flow-Through Offering”, and together with the Subscription Receipt Offering and the 778 Non-Brokered Common Share Offering, the “RTO Financing”). In total, 778 and Minto raised aggregate gross proceeds of $31,033,230.80 under the RTO Financing. Story continues The brokered portion of the RTO Offering was conducted in accordance with an agency agreement dated September 21, 2021, as amended from time to time (the “Agency Agreement”), which has been entered into between 778, Minto, Stifel GMP, Raymond James Ltd. (together with Stifel GMP, the “Co-Lead Agents”), Haywood Securities Inc. and Echelon Wealth Partners Inc. (collectively with the Co-Lead Agents, the “Agents”). A copy of the Agency Agreement has been filed on 778’s issuer profile on SEDAR at www.sedar.com.
RTO Financing Prior to the completion of the RTO: (i) 778 completed a consolidation of the common shares of 778 at a ratio of one post-consolidation share of 778 (“Consolidated 778 Share”) for every 9.4 pre-consolidation shares of 778 (the “778 Consolidation”); and (ii) Minto Explorations completed a consolidation on the ratio of one post-consolidation share (“Consolidated Minto Share”) for every 12 pre-consolidation shares (the “Minto Consolidation”).
As previously announced, on September 21, 2021 and October 22, 2021, 778 completed the closing of the first and second tranche, respectively, of the private placement of subscription receipts of 778 (the “Subscription Receipts”) at a price of $2.60 per Subscription Receipt, for aggregate gross proceeds of $16,387,477.60 (the “Subscription Receipt Offering). Immediately prior to the completion of the RTO, the net proceeds from the sale of the Subscription Receipt Offering were released from escrow to 778 and each Subscription Receipt was converted into one Consolidated 778 Share, resulting in the issuance of 6,302,876 Consolidated 778 Shares. Consolidations
Following the RTO, the prior shareholders of Minto Explorations now collectively exercise control over the Resulting Issuer. The former shareholders of Minto Explorations (not including the shareholders who acquired Consolidated Minto Shares pursuant to the Flow-Through Offering) received an aggregate of 60,228,863 Resulting Issuer Shares, representing 83% of the issued and outstanding Resulting Issuer Shares. Minto has 72,491,851 Resulting Issuer Shares outstanding following the completion of the RTO, the 778 Consolidation, the Minto Consolidation and the conversion of the Subscription Receipts issued pursuant to the Offering. Pursuant to the Amalgamation Agreement, 778 and Minto Explorations amalgamated resulting in: (a) each shareholder of Minto receiving one Resulting Issuer Share in exchange for each Consolidated Minto Share held by such holder and the Consolidated Minto Shares being cancelled; (b) each shareholder of 778 receiving one Resulting Issuer Share in exchange for each Consolidated 778 Share held by such holder and the Consolidated 778 Shares being cancelled; (c) the resulting amalgamated entity was named “Minto Metals Corp.”; (d) new corporate governance policies were adopted by the Resulting Issuer; and (f) the current directors and officers of 778 resigned and the Resulting Issuer reconstituted the board of directors and management, as set out below.
Summary of the RTO It is anticipated that the net proceeds of the RTO Financing will be used by the Resulting Issuer to fund operational improvements at the Minto mine property, near-mine exploration activities and for general corporate purposes including working capital following completion of the RTO. Although the Resulting Issuer intends to use the proceeds of the RTO Financing as described above, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary for the Resulting Issuer to achieve its objectives or to pursue other opportunities that management believes are in the interests of the Resulting Issuer.
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