Electra Battery Materials announces terms of $30M private placement

Electra Battery Materials (ELBM) announces the detailed terms of its previously announced $30M financing in connection with its ongoing financial restructuring with the holders of senior secured convertible notes. The Company has entered into an engagement letter with Cantor Fitzgerald Canada Corporation and ECM Capital Advisors, as co-lead agents, each on its own behalf, and on behalf of a syndicate of agents which includes Independent Trading Group and Kernaghan & Partners, in connection with a “best-efforts” private placement for the sale of a minimum of 40,000,000 units of the Company at a price of $0.75 per Unit for aggregate gross proceeds of a minimum of $30M. As previously announced on August 21, the Offering forms a key part of Electra’s comprehensive plan to strengthen its capital structure and secure funding to advance the commissioning of North America’s first battery-grade cobalt sulfate refinery, located in Temiskaming Shores, Ontario. Each Unit consists of one common share and one Common Share purchase warrant, with each Warrant entitling the holder thereof to purchase one Common Share at a price of $1.25 for a period commencing on the date that is 60 days following the completion of the Offering until the date that is 36 months following the completion of the Offering. The Company has also agreed to grant the Agents an option to sell up to an additional 15% of the Offering in Units at the Issue Price. The Offering is supported by a $10M conditional commitment from the Lenders. Net proceeds from the Offering are intended to be used to advance the completion and ramp-up of Electra’s cobalt refinery, advance the Company’s black mass recycling program, to repay the $2M aggregate principal amount of unsecured 90-day promissory notes issued to the Lenders on August 22, to pay expenses in connection with the Restructuring and to support general working capital and corporate purposes. In the event that the aggregate gross proceeds from the Offering exceeds $34.5M, all such excess amounts will be used to repurchase senior secured convertible notes from the Lenders. The Offering is scheduled to close on or around October 15, concurrently with the closing of the Restructuring and is subject to shareholder approval at the special meeting of the Company’s shareholders to approve the Restructuring, which is currently anticipated to take place on or around October 9, as well as other customary conditions including the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange and notification to the Nasdaq Stock Market. There can be no assurance as to whether or when the Offering may be completed.