Secured notes sold to Ekagrata to fund environmental impact assessment
By Devika Patel
Knoxville, Tenn., Feb. 24 – Quest Rare Minerals Ltd. said it will sell a C$2.5 million 7% secured convertible note to Ekagrata Inc. in a private placement that is expected to be completed in two tranches.
The note matures on Dec. 31, 2016 and is convertible into common shares at a fixed price of C$0.13 per share. The conversion price is an 18.75% discount to the Feb. 23 closing share price of C$0.16.
Ekagrata also will receive a four-year warrant for 2.5 million shares. The warrants are each exercisable at C$0.15, a 6.25% discount to the Feb. 23 closing share price.
Proceeds will be used for the environmental impact assessment of Quest’s Strange Lake rare earths project and working capital.
The company also said it plans a C$600,000 short-form prospectus offering of shares and warrants with Investissement Quebec and its subsidiary Ressources Quebec.
Quest is a rare earth metals explorer based in Toronto.
| Issuer: | Quest Rare Minerals Ltd.
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| Issue: | Secured convertible note
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| Amount: | C$2.5 million
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| Maturity: | Dec. 31, 2016
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| Coupon: | 7%
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| Conversion price: | C$0.13
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| Conversion premium: | 350%
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| Warrants: | For 2.5 million shares
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| Warrant expiration: | Four years
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| Warrant strike price: | C$0.15
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| Investor: | Ekagrata Inc.
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| Pricing date: | Feb. 24
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| Stock symbol: | Toronto: QRM
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| Stock price: | C$0.16 at close Feb. 23
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| Market capitalization: | C$13.51 million
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