20 November 2020
NorZinc Ltd. is pleased to announce that it has closed its previously announced rights offering (the “Rights Offering”) which expired on November 18, 2020, raising total aggregate gross proceeds of approximately $9,492,000 and representing 94.92% of the total rights offered.
Details of Subscriptions
Upon closing, the Company issued a total of 146,028,424 common shares of the Company (each a “Common Share”) under the Rights Offering at a price of $0.065 per Common Share. An aggregate of 86,662,428 Common Shares were issued under the basic subscription privileges, an aggregate of 10,999,124 Common Shares were distributed under the additional subscription privileges, and RCF VI CAD LLC and its affiliated entities (“RCF”) purchased an additional 48,366,872 Common Shares pursuant to the standby purchase agreement (the “Standby Purchase Agreement”). To the knowledge of the Company, no person became an insider as a result of the Rights Offering. The Company did not pay any fees or commissions in connection with the distribution of securities in the Rights Offering.
As previously announced on October 13, 2020, in connection with the Rights Offering, the Company entered into the Standby Purchase Agreement with RCF VI CAD LLC. RCF exercised its basic subscription privilege under the Standby Purchase Agreement to purchase 61,935,395 Common Shares and also purchased an additional 48,366,872 Common Shares pursuant to the Standby Purchase Agreement. RCF paid for its 110,302,267 Common Shares purchased in connection with the Rights Offering by setting off $7,169,647 of NorZinc’s obligations outstanding under the bridge loan, representing all US$5.25 million of principal, and interest outstanding, for the purchase price payable in connection with the exercise of its Rights and purchase of additional Common Shares.
As of the closing date, 536,079,345 Common Shares are issued and outstanding, reflecting the 146,028,424 Common Shares issued pursuant to the Rights Offering.
Surface Drill Program Update
As announced on November 17, 2020 the Company has completed its first hole PC-20-225 of its surface drill program and core samples are currently at the assay lab and testing is underway. Results will be disclosed as soon as the Company’s has completed its QA/QC review.
At 11am Pacific Time on November 19, 2020, NorZinc decided to halt drilling operations due to increasing and compounding challenges with working safely, in deteriorating winter weather conditions. Covid-19 has introduced several logistical and manpower constraints, and it is the Company’s view that it is not safe nor feasible to continue drilling at this time.
The drill rig will remain on the drill pad throughout winter, and will be ready to resume drilling in the spring.