VANCOUVER, British Columbia, Dec. 29, 2017 (GLOBE NEWSWIRE) -- East Africa Metals Inc. (TSX-V:EAM) (“East Africa” or the “Company”) announces the closing of a $2M private placement with Luck Sky Resources Investment Limited (“LS”), under which the Company issued 7,700,000 units at a price of $0.26 per unit, for gross proceeds of $2,002,000. Each unit consists of one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder to purchase one common share at an exercise price of $0.45 for a period of 24 months from the date of closing.
All of the securities issued in connection with this placement are subject to a hold period expiring on April 29, 2018. The proceeds will be used to continue exploration programs on the Company’s projects in Ethiopia and general working capital.
The Company has agreed to pay finder’s fees in connection with the subscription in an aggregate amount of $100,100 in cash to Brookstone Capital Limited, an arm’s length party. Brookstone has agreed to defer payment of the finder’s fee until closing of the additional 44,400,000 units, described in the Company’s news release dated December 14, 2017.
Pursuant to the binding subscription agreement between the Company and LS, LS has subscribed for an additional 44,400,000 units at a price of $0.26 per unit, for gross proceeds of $11,544,000. Each unit consists of one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder to purchase one common share at an exercise price of $0.45 for a period of 24 months from the date of closing.
Closing of the remaining 44,400,000 units is subject to certain conditions, including but not limited to, disinterested shareholder approval of the creation of a new control person and approval of the TSX Venture Exchange. Upon completion of the private placement for the remaining 44,400,000 units, LS will own approximately 25.8% of the Company’s outstanding shares (34.2% on a diluted basis).
The parties are working towards satisfying the conditions and closing the remaining units in a timely manner.
