Medallion Resources Ltd said it has received proceeds of US$1,000,000 (C$1,286,000) from the issuance of US$1,150,000 principal amount unsecured promissory notes.
The notes, due August 2, 2023, bear interest at 5% and were issued to two US investors at an original issue discount of US$150,000.
The company said the proceeds will be used for working capital and general corporate purposes including continuing to advance the Ligand Assisted Displacement (LAD) Chromatography separation of rare earth elements (REEs) in partnership with Purdue University and Medallion's proprietary monazite process, as well as advancing its clean energy technology strategy.
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Subject to regulatory approval and completion of the company's planned public offering of shares or units and uplist to the Nasdaq Capital Market or other US National Securities Market and delisting from the TSX Venture Exchange (TSXV) any outstanding principal amount of the notes may be converted into shares or units issued in the uplist at 75% of the price of the shares or units issued.
At the time of the delisting, the company shall also issue to the purchasers a warrant to purchase at the uplist price the number of shares calculated by dividing 50% of the principal amount by the conversion Price at any time from the day the company's shares are delisted from the TSXV until August 1, 2027.
For example, if the uplist were at US$4.00 per share, the minimum price under Nasdaq initial listing requirements, then the company would issue a warrant to purchase 191,667 shares at US$4.00 per share exercisable after the shares are delisted from the TSXV prior to August 2, 2027. For clarity, while the company's shares continue to be listed on the TSXV, the note cannot be converted and the warrant cannot be exercised.
Medallion Resources has exclusively licensed Ligand Assisted Displacement (LAD) Chromatography developed by Purdue University from Purdue Research Foundation to separate rare earth elements from all raw material feedstocks excluding coal sources and excluding recycled materials from manufacturing wastes and recyclates from battery and magnet sources.
Separately, Medallion has developed a proprietary process and related business model to achieve low-cost, near-term, extraction of rare earth elements from monazite, a phosphate mineral that is a common byproduct of heavy mineral sand operations.
REEs are critical inputs to electric and hybrid vehicles, robotics, electronics, imaging systems, wind turbines and strategic defense systems. Medallion is committed to following best practices and accepted international standards in all aspects of mineral transportation, processing, and the safe management of waste materials. Medallion utilizes Life Cycle Assessment methodology to support investment and process decision-making.
Contact the author at jon.hopkins@proactiveinvestors.com