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Razor Energy Corp. to raise USD4m in funding for geothermal power project

Swan Hills, Alberta, Canada (source: flickr/ MissusK (Cindy), creative commons)
Alexander Richter 1 Oct 2019

Canadian Razor Energy Corp. is raising USD 4 million in funding in a private placement to help finance its geothermal projects in Alberta, Canada.

In a release Canadian Razor Energy Corp. has announced an agreement with GMP FirstEnergy on behalf of a syndicate of agents pursuant to which the Agents have agreed to market, on a “best efforts ” private placement basis, up to 2,702,800 Common Shares that will qualify as “flow-through shares”.

The 2,702,800 Flow-Through Shares will be issued at a price of $1.85 per Flow-Through Share, representing an approximate 16% premium to the closing price of the Common Shares on the TSX Venture Exchange (TSXV) on September 30, 2019, for aggregate gross proceeds of up to approximately $5,000,000 (around USD 4 million).

The gross proceeds from the sale of Flow-Through Shares will be used by the Company to incur qualifying “Canadian renewable and conservation expenses” related to the Company’s geothermal power projects in Alberta.

The Qualifying Expenditures will be renounced in favour of the subscribers of Flow-Through Shares with an effective date on or before December 31, 2019, and in the aggregate amount of not less than the gross proceeds of the Offering. CRCE is a federal program to encourage investments in clean energy generation and energy conservation projects by providing income tax incentives to investors.

In general, expenditures that qualify as CRCE are considered to be Canadian exploration expense under the Income Tax Act. The Offering is being made by way of private placement in Canada.

The Flow-Through Shares will be subject to a four month hold period under applicable securities laws in Canada. The Offering is expected to close on or about October 17, 2019, subject to customary closing conditions, including the approval of the TSXV.

Source: Company release