Ceylon Graphite Announces Closing of $365,000 Convertible Debenture Financing and Extension of Convertible Debenture

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VANCOUVER, British Columbia, Oct. 27, 2023 (GLOBE NEWSWIRE) --

Ceylon Graphite Corp. (“Ceylon” or the “Company”) (TSX-V: CYL) (OTC: CYLYF) (FSE: CCY) is pleased to announce it has closed a non-brokered private placement of C$365,000 (the “Financing”) of 9% senior secured convertible debenture units of the Company (the “Debenture Units”). The net proceeds from the Financing shall be used for operating expenses for the Company’s mining projects and deposits for the renewal of mining licenses in Sri Lanka, and for working capital and general corporate purposes.

Each Debenture Unit consists of: (i) C$1,000 principal amount of 9% senior secured convertible debenture of the Company (each, a “Debenture”); and (ii) 20,000 common share purchase warrants of the Company (each, a “Warrant”), with each Warrant exercisable for one common share of the Company (a “Warrant Share”) at an exercise price of C$0.06 per Warrant Share for a period of one year from the date of issuance. A total of 7,300,000 Warrants were issued and are exercisable for 7,300,000 Warrant Shares. An aggregate of C$365,000 principal amount of Debentures was subscribed for and are convertible for up to 7,300,000 common shares of the Company (each, a “Debenture Share”) at the option of the holder thereof at any time prior to the date that is one year from the date of issuance at a conversion price of C$0.05 per Debenture Share.

The Debentures shall bear interest at an annual rate of 9%, payable in cash semi-annually in arrears. Interest on the Debentures may alternatively be paid in common shares of the Company (the “Common Shares”) at the Company’s option, subject to the approval of the TSXV. An entity controlled by the Company’s CEO has pledged publicly traded shares of a third party to secure the Company’s obligations under the Debentures. In addition, the Debentures are secured against all of the present and after acquired personal property of the Company.

In connection with the Financing, the Company has issued to eligible finders an aggregate of: (i) 455,000 finders warrants (the “Finder’s Warrants”) entitling the holder to acquire one unit of the Corporation (a “Finder Unit”) at an exercise price of $0.05 at any time up to one year from the date of issuance, with each Finder Unit comprised of one Common Share and one Warrant, with each such Warrant exercisable for one Warrant Share at a price of $0.06 per Warrant Share for a period of one year from the date of issuance of the Finder Unit, and (ii) 455,000 Finder Units.