Azimut Announces $8 Million Bought Deal Private Placement Financing

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LONGUEUIL, Quebec, Sept. 13, 2023 (GLOBE NEWSWIRE) -- Azimut Exploration Inc. (TSXV: AZM) (OTCQX: AZMTF) (“Azimut” or the “Company”) is pleased to announce that it has entered into an agreement with Paradigm Capital Inc. on behalf of a syndicate of underwriters, including Red Cloud Securities Inc. (collectively, the “Underwriters”), in connection with a bought deal private placement financing (the “Offering”) for total proceeds of $8,000,000, consisting of 2,442,100 common shares of the Company that qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Income Tax Act (Canada) and section 359.1 of the Taxation Act (Québec)) (the “Premium FT Shares”) at a price of $2.0475 per Premium FT Share, 550,600 common shares of the Company that qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Income Tax Act (Canada) and section 359.1 of the Taxation Act (Québec)) (the “FT Shares”) at a price of $1.8165 per FT Share, and 1,904,800 common shares of the Company (the “Hard Dollar Shares”) at a price of $1.05 per Hard Dollar Share (the “Hard Dollar Issue Price”).

In addition, the Company has granted the Underwriters an option (the “Underwriters’ Option”) to sell that number of additional Hard Dollar Shares at the Hard Dollar Issue Price for additional aggregate gross proceeds of up to $2,000,000, exercisable 48 hours prior to the Closing Date (as defined below). The term “Offering” includes the additional Hard Dollar Shares that may be issued on the exercise of the Underwriters’ Option, if any.

Pursuant to an investor rights agreement between the Company and Agnico Eagle Mines Limited (TSX: AEM) (“Agnico”) dated February 26, 2020, as amended, Agnico has indicated that it intends to increase its interest in the Company from a current 10.06% ownership to a pro-forma ownership of approximately 12% on a post-Offering basis.

The Company will use an amount equal to the gross proceeds received by the Company from the sale of the FT Shares, pursuant to the provisions in the Income Tax Act (Canada) and the Taxation Act (Québec), to incur eligible “Canadian exploration expenses” that qualify as “flow-through mining expenditures” as both terms are defined in the Income Tax Act (Canada) (the “Qualifying Expenditures”). The Company will use an amount equal to the gross proceeds received by the Company from the sale of the Premium FT Shares, pursuant to the provisions in the Income Tax Act (Canada), to incur eligible “Canadian exploration expenses” that qualify as “flow-through critical mineral mining expenditures” as such terms are defined in the Income Tax Act (Canada) (the “Critical Minerals Qualifying Expenditures”). The Company will incur the Qualifying Expenditures and the Critical Minerals Qualifying Expenditures on or before December 31, 2024, and will renounce all such expenditures in favour of the subscribers of the Premium FT Shares and FT Shares, as applicable, effective December 31, 2023. In addition, with respect to Québec resident subscribers of the Premium FT Shares and FT Shares who are eligible individuals under the Taxation Act (Québec), the Canadian exploration expenses will also qualify for inclusion in the “exploration base relating to certain Québec exploration expenses” within the meaning of section 726.4.10 of the Taxation Act (Québec) and for inclusion in the “exploration base relating to certain Québec surface mining expenses or oil and gas exploration expenses” within the meaning of section 726.4.17.2 of the Taxation Act (Québec). The proceeds from the sale of the Hard Dollar Shares will be used for exploration and for general corporate purposes.