Euro Manganese Inc (ASX:EMN) (CVE:EMN) (OTCMKTS:EUMNF) (FRA:E06) has closed the second tranche of its A$30 million (C$29 million) private placement after receiving approval from shareholders at a special meeting on May 5, 2021.
The Tranche 2 Placement comprised 8,333,334 CHESS Depositary Interests (CDIs) with each CDI representing one common share at a price of A$0.60 per CDI for aggregate gross proceeds A$5 million (around C$4.8 million).
Aggregate gross proceeds of A$30 million will be used to complete the installation and commissioning of the company’s high-purity manganese demonstration plant, the initial year of operation of this plant, completing the Chvaletice Manganese Project’s permitting and feasibility study, for certain scheduled land acquisition payments and for general corporate purposes.
The financing will also allow the company to complete all site and technical work required at the Czech Republic project for a final investment decision expected in 2022.
Notably, the offering was anchored by a strategic investor and an ESG-focused fund, and also received strong support from several existing institutional shareholders.
The second tranche of the offering was also used to introduce two new institutional investors with a strong positive view on ESG projects and the market opportunity for high-purity manganese in Europe.
Closing of first tranche
In March, Euro Manganese closed the first tranche of the private placement, along with an initial investment from EIT InnoEnergy of €62,500 (about C$92,850).
Canaccord Genuity (Australia) Ltd acted as lead manager and bookrunner to the offering, with Bacchus Capital Advisers Ltd acting as financial adviser.
EIT InnoEnergy investment
In line with the terms of a project support agreement with EIT InnoEnergy, in March the company received the first of three investments which have a total value of €250,000.
The first investment made by EIT of €62,500 was advanced to the company on March 24, 2021.
Accordingly, the company will issue 147,380 shares to EIT at C$0.63 per share being the 10-day volume-weighted average stock price on the TSX Venture Exchange prior to receipt of the first investment.
The issue of the shares is not expected to occur until early January 2022 and remains subject to the approval of the TSX-V and will be subject to a four-month and one day statutory hold period.
Investment incentive eligibility extension
Additionally, the company’s eligibility timeline for certain investment incentives in the Czech Republic has been extended by two years.
These credits are to be applied toward Czech corporate income taxes payable on future earnings generated by the project.
Based on eligible Czech-based assets acquired of around CZK2.4 billion (about C$136 million), the tax credits would amount to around CZK470.3 million or C$27 million, over and above normal tax depreciation on such assets.
The company applied for and received approval to prolong the deadline for fulfilling the general conditions of the investment incentives by two years, to March 25, 2025.
Stock option grants
Euro Manganese has also granted stock options to certain officers, employees and consultants to purchase up to an aggregate of 2.35 million shares.
These options are exercisable for a term of 10 years at an exercise price of C$0.61 per share.
The options will vest one-third on the date of grant, and one-third on each of the first and second anniversaries of the date of grant, except for the options granted to officers, which vest in full five years from the date of grant, and 350,000 options granted to a consultant, which vest one-third on the date of grant and one-third on each of the four and eight-month anniversaries of the date of grant.