Storm Exploration Inc. (TSXV: STRM), a Vancouver-based exploration company, said it closed a non-brokered private placement on Sunday, raising gross proceeds of C$3.2 million. The company issued 8 million units at C$0.40 per unit. Each unit comprises one common share and one-half of a warrant. Each whole warrant entitles the holder to purchase one additional common share at C$0.55 for two years from closing and includes a control person blocker provision.
Storm Exploration paid eligible finders C$24,000 in cash for certain units sold and issued 135,000 finder's warrants with the same terms as the offering warrants. The company said net proceeds will be used to fund exploration drilling programs at its Gold Standard project and for general corporate and working capital purposes. All securities issued in the offering are subject to a hold period until January 15, 2027.
Eric Sprott, acting through 2176423 Ontario Ltd., purchased 5 million units for C$2 million. Before the transaction, Sprott held 763,000 shares, or about 2.7% of the company's outstanding shares on a non-diluted basis. Following the purchase, he holds 5,763,000 shares and 2,500,000 warrants, representing about 15.8% of outstanding shares on a non-diluted basis and about 19.99% on a partially diluted basis if the warrants are exercised.
Storm Exploration said the transaction is a related party transaction under Multilateral Instrument 61-101. The company relied on exemptions from formal valuation and minority shareholder approval requirements because neither the fair market value of the units issued nor the consideration paid exceeded 25% of its market capitalization.
