/NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
TORONTO, March 17, 2021 /CNW/ - Purepoint Uranium
Group Inc. (TSXV: PTU) ("Purepoint" or the "Company")
is pleased to announce that it has entered into an engagement
letter agreement (the "Engagement Agreement") with Red Cloud
Securities Inc. ("Red Cloud")
pursuant to which Red Cloud will act
as lead agent and bookrunner to sell up to C$5.0 million in units of the Company (the
"Units") at a price of C$0.09
per Unit and flow-through units of the Company (the "FT
Units", together with the Units are hereinafter referred to as
the "Offered Securities") at a price of C$0.105 per FT Unit on a fully marketed, private
placement basis (the "Offering"). Under the Offering,
the Company intends to sell a minimum of C$2.0 million of Units (the "Minimum Unit
Offering"). Pursuant to the Engagement Agreement, the Company
has granted Red Cloud an option (the
"Over Allotment Option"), exercisable up to 48 hours prior
to the closing date of the Offering (the "Closing Date"), to
sell up to an additional C$1,000,000
in any combination of Units and FT Units at the offering prices.
Since the allocation of the number of Units and FT Units for
the Offering could not be ascertained at this time, in the event
that the Offering is comprised in Units only, the Company will
issue up to 66,666,667 Units with a maximum aggregate gross
proceeds of C$6.0 million after
taking into account the Units issuable pursuant to the Over
Allotment Option. In the event that the Offering is comprised
of C$2.0 million of Units (due to the
Minimum Unit Offering), and C$4.0
million of FT Units, the Company will issue up to 38,095,238
FT Units and up to 22,222,222 Units for aggregate gross proceeds of
C$6.0 million.
Each Unit shall be comprised of one common share in the capital
of the Company (each a "Unit Share") and one common share
purchase warrant (each, a "Warrant"). Each FT Unit shall be
comprised of one flow-through common share of the Company (each, a
"FT Share") and one half of one Warrant. Each whole Warrant
shall be exercisable to acquire one common share of the Company
(each, a "Warrant Share") at a price of C$0.13 at any time on or before the date which is
24 months following the Closing Date.
In connection with the Offering, the Company has agreed to pay
to Red Cloud and any other agents
facilitating the Offering (collectively, the "Agents") a
cash commission equal to 7.0% of the gross proceeds of the Offering
and issue to the Agents non-transferrable compensation warrants to
purchase in aggregate that number of common shares of the Company
(each, an "Agent's Warrant Share") which is equal to 7.0% of
the number of Offered Securities sold under the Offering at a price
of C$0.105 per share for a term of 24
months following the Closing Date. Offered Securities sold to
purchasers under the president's list for gross proceeds of up to
C$500,000 (the "President's
List") will be subject to a reduced cash commission equal to
3.5% of the gross proceeds of the Offering and compensation
warrants to purchase in aggregate that number of Agent's Warrant
Shares which is equal to 3.5% of the number of Offered Securities
sold to purchasers under the President's List.
The net proceeds raised from the sale of Units will be for the
exploration and advancement of the Company's exploration and
advancement of the Company's projects in the Athabasca Basin in Saskatchewan and for general working capital
purposes. Proceeds from the sale of FT Shares will be used to incur
"Canadian exploration expenses" as defined in subsection 66.1(6) of
the Income Tax Act and "flow through mining expenditures" as
defined in subsection 127(9) of the Income Tax Act. Such proceeds
will be renounced to the subscribers with an effective date not
later than December 31, 2021, in the
aggregate amount of not less than the total amount of gross
proceeds raised from the issue of FT Shares.
The Offering is scheduled to close on or about April 7, 2021. The completion of the Offering is
subject to certain conditions, including, but not limited to, the
Agents securing a minimum of C$2,000,000 in gross proceeds from the sale of
Units, and the receipt of all necessary regulatory and other
approvals, including the approval of the listing of the Unit
Shares, FT Shares, Warrant Shares and the Agent's Warrant Shares on
the TSX Venture Exchange. Resale of the common shares of the
Company distributed under the Offering will be restricted,
including a hold period in Canada
of four months and one day following the closing date of the
Offering.
This press release shall not constitute an offer to sell or
the solicitation of an offer to buy the Offered Securities, nor
shall there be any sale of the Offered Securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. The Offered Securities
being offered will not be, and have not been, 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, a U.S.
person.
About Purepoint
Purepoint Uranium Group Inc. is focused on the precision
exploration of its six projects in the Canadian Athabasca Basin,
the world's richest uranium region. Established in the Athabasca Basin well before the initial
resurgence in uranium earlier last decade, Purepoint's flagship
project is the Hook Lake Project, a joint venture with two of the
largest uranium suppliers in the world, Cameco Corporation and
Orano Canada Inc. The Hook Lake JV Project is on trend with recent
high-grade uranium discoveries including Fission Uranium's Triple R
Deposit, NexGen's Arrow Deposit and the Hook Lake JV's Spitfire
discovery.
Neither the Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the Exchange) accepts
responsibility for the adequacy or accuracy of this press
release.
Disclosure regarding forward-looking statements
This press release contains projections and forward-looking
information that involve various risks and uncertainties regarding
future events. Such forward-looking information can include without
limitation statements based on current expectations involving a
number of risks and uncertainties and are not guarantees of future
performance of the Company. These risks and uncertainties could
cause actual results and the Company's plans and objectives to
differ materially from those expressed in the forward-looking
information. Actual results and future events could differ
materially from those anticipated in such information. These and
all subsequent written and oral forward-looking information are
based on estimates and opinions of management on the dates they are
made and expressly qualified in their entirety by this notice.
SOURCE Purepoint Uranium Group Inc.