Strategic Resources closes reverse takeover of BlackRock Metals

On March 31, 2023, Strategic Resources Inc. ("Strategic") announced that it closed its acquisition of BlackRock Metals Inc. ("BlackRock") and the conversion of its subscription receipts to shares.

Transaction Details

The acquisition, which constituted a reverse takeover of Strategic, was undertaken by way of an arm’s length share exchange agreement announced on December 13, 2022. Pursuant to the agreement, BlackRock's shareholders received 280,000,000 shares of Strategic (46,666,667 on a post-consolidation bases) in exchange for 100% of BlackRock's existing common shares, representing total consideration equal to approximately C$140 million. Upon completion of the transaction, BlackRock became a wholly-owned subsidiary of Strategic. Strategic continues to trade on the TSX Venture Exchange (the "TSXV") under the name "Strategic Resources Inc."

In conjunction with the transaction, Strategic:

• consolidated its 44,833,038 outstanding shares on a six-for-one basis to 7,472,173 shares;
• acquired all of the outstanding shares of BlackRock from the BlackRock shareholders in exchange for 46,666,667 shares of Strategic; and
• issued a total of 2,256,609 restricted share units (RSUs) to replace outstanding BlackRock RSUs, the exercise of which remains subject to disinterested shareholder approval being received at the Strategic's annual general meeting scheduled for April 26, 2023.

Offering Details

Strategic also issued 4,500,000 subscription receipts at C$3.00 per subscription receipt (each on a post-consolidation basis; 27,000,000 receipts at a price C$0.50 per receipt on a pre-consolidated basis) for gross proceeds of C$13,500,000. Each subscription receipt automatically converted to one common share of Strategic on closing of the merger transaction. Strategic plans to use the net proceeds from the offering to advance the BlackRock project to a construction decision, continue permitting and pre-feasibility study work at its Mustavaara project in Finland, and for general corporate purposes.

Strategic also issued C$500,000 of convertible debentures with a coupon rate of 10% and a term expiring on the earlier of (i) one year, or (ii) closing the merger transaction. Proceeds of this interim debt financing were used to fund Strategic's costs of completing the transaction. With the closing of the transaction, the debentures were automatically converted to common shares of Strategic at C$3.00 per share (on a post-consolidation basis).

Further information can be found on Canada Newswire’s website.

BlackRock is a privately-owned Canadian company developing a fully integrated, environmentally enhanced, metals and materials manufacturing business from its wholly owned, world-class vanadium and titanium bearing magnetite ("VTM") deposit in Québec, Canada. The construction-ready BlackRock Project includes what will be the first VTM mine in North America and is designed to utilize green hydrogen at the metallurgical plant. These critical minerals will be transformed in Québec into green products used by industry to produce and strengthen steel and aluminum alloys enhancing the reduction of global GHG emissions.

Strategic is a Vancouver, Canada-based mineral exploration and development company focused on vanadium projects in Finland.