Rights Offering

September 10, 2019

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Qualified parties interested in participating in the Ucore Rights Offering are cautioned that finalization of their intended level of participation may take several days to finalize, and must be fully completed by no later than 5:00 p.m. EDT on October 23, 2019.

Shareholders are encouraged to contact Mark MacDonald, Vice President Business Development at (902) 482-5214; or our Communications Agent, Shorecrest Group, at 1-888-637-5789 or email rightsoffering@ucore.com if you have any questions regarding the above, or if you require assistance in the completion of applicable documents.

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On September 10, 2019, Ucore Rare Metals announced a Rights Offering on the basis of recent developments in the U.S. vs China trade conflict, in combination with a number of remarkable initiatives by Federal and State authorities designed to address the near term need for U.S. independence in Critical Metals production.

Current international events suggest that the U.S. is now on the threshold of a significant disruption to the domestic REE supply chain. Central to that crisis are heavy REE (“HREE”): materials indispensable to a host of American industries, including defense systems and artificial intelligence (“AI”). These are materials which Ucore’s Bokan Project has at the highest levels of concentration on U.S. soil 1 and prospectively available in the near term 2.

This unique combination, in concert with recent unprecedented U.S. Federal Government and State of Alaska critical minerals development support, have placed Ucore on a very short list of prospective U.S. government partners capable of alleviating this current U.S. crisis; and perhaps the sole proponent capable of doing so fully and completely on U.S. soil. Without this feature — a domestic mine-to-metal-to-market capability within American borders — the U.S. cannot claim to be independent in any true sense.

Join us in this unique opportunity to establish American HREE independence, in the near term, with Ucore’s M3 Initiative.”

Jim McKenzie, President & CEO

1 https://ucore.com/ucore-increases-resource-at-bokan-dotson-ridge
2 The Company is commencing engineering and permitting required to prepare the Bokan HREE Project for construction (i.e. “Shovel Ready” status). https://ucore.com/ucore-announces-m3-plan-of-action-for-independent-u-s-hree-supply-chain

 

For more information on Ucore’s M3 Plan of Action and the Company’s vision for American HREE Independence:

September 4, 2019 – McKenzie Provides Strategic Update to Ucore Shareholders

September 10, 2019 – Ucore Announces M3 Plan of Action for Independent U.S. HREE Supply Chain

September 10, 2019 – Ucore Announces Rights Offering

September 23, 2019 – Ucore Updates on M³ Plan of Action:Co-Products & Permitting

Questions?

Have a question about the Rights Offering?  Please call our Communications Agent, Shorecrest Group, at 1-888-637-5789 or email rightsoffering@ucore.com

The Ucore Rights Offering

Why is Ucore Issuing a Rights Offering?

• Proven & Highly Effective – Rights Offerings (“R.O.’s”) are a proven and highly effective Investment Instrument. Introduced in Canada in its current form less than four years ago, the list of highly successful R.O.’s in the mining sector is substantial. R.O.’s are typically used in circumstances where the issuer has a large and loyal existing shareholder base, and are often employed in applications that include the advancement of near term projects and corporate acquisitions of target entities.

• Simplified Process – The process by which funds can be raised via R.O. has been streamlined significantly, with the introduction of the new R.O. exemption by the Canadian Securities Administrators in December, 2015.

• Highly Flexible – Ucore’s R.O. will allow the Company to raise up to CAD $28M in new equity capital, a possibility which far exceeds the company’s current expectation utilizing Private Placement or Prospectus instruments (“Traditional Financings”).  The Funds will be used to progress a number of immediate initiatives, as explained in Ucore’s recent press release , and the opportunity to build shareholder value.

• Low Transaction Costs – The underwriting costs of Traditional Financings are typically well in excess of R.O. undertakings, the former of which can readily incur transactional costs well into 6 figures.  An R.O. such as Ucore’s avoids:

• Finders fees
• Agent Commissions
• Prospectus Drafting Fees

Legal fees associated with a R.O. are also significantly lower than those of most Traditional Financings.

• Reward to Existing Shareholders – You MUST be an existing Ucore shareholder as of 5 pm EDT on September 17, 2019 to participate in this R.O. and be issued rights by the company.  Unlike Traditional Financings, the process is Not Limited to High Net Worth Accredited Shareholders, and allows existing Ucore shareholders to participate in and to receive the benefits outlined below.

In Short – the R.O. facilitates Rapid & Significant Funding , with Lower Transaction Costs, as well as the efficient Fulfilment of Ucore’s Near-Term Corporate Vision

What’s in it for me as a Ucore Shareholder?

• Discounted Warrant – Essentially, the Company is offering, to every qualifying shareholder of Ucore on the record date, a warrant to purchase a common share at a fixed price.  Where this differs from traditional warrants is that the Right can have an exercise price that is at a significant discount to market (and, in fact, must be priced as such to qualify for certain TSX-V policies).   The process allows those already most actively participating in the Company to acquire common shares at a deep discount to the market price.

• Free-Trading Shares – While shares issued through traditional private placements carry a four-month hold period, during which they cannot be sold, shares issued as part of a R.O. carry no such restriction for Canadian residents, offering exceptional liquidity.

• Equitable – An R.O. allows all qualifying shareholders on the record date to participate.  As such, for each individual shareholder, no percentage dilution occurs, to the extent that they fully participate, and their relative ownership increases based on the percentage of eligible shareholders who do not participate.

• Allows All Qualifying Shareholders to Participate – All qualifying shareholders on the record date will participate in the R.O.  If you are a Canadian resident, you don’t have to meet minimum financial thresholds or be an “Accredited” Investor.   The methodology is meant to reward existing holders (regardless of net worth) and value-driven investors to acquire shares directly from the Company, at a discount; an opportunity traditionally reserved for Accredited Investors with substantial net assets.

In Short – The Rights Offering provides an exceptional opportunity for all Canadian and other qualifying existing shareholders to acquire discounted shares directly from the Company, and without the traditional costs and highly exclusive eligibility constraints associated with Traditional Financings.

About Ucore Rare Metals Inc.

Ucore is a development-phase company focused on rare metals resources, extraction and beneficiation technologies with near-term potential for production, growth and scalability. The Company has a 100% ownership stake in the Bokan-Dotson Ridge Rare Earth Project. On March. 31, 2014, Ucore announced the support of the Alaska State Legislature for Senate Bill 99 (2014), which authorized the AIDEA to issue up to USD $145 Million in bonds for the infrastructure and construction costs of the Bokan-Dotson Ridge Rare Earth Project.Ucore’s vision and plan is to transition to become a leading advanced technology company that provides mineral separation products and services to the mining and mineral extraction industry. This vision includes the development of the Alaska Strategic Metals Processing Complex (the “Alaska SMC”) in Southeast Alaska and the development of the Company’s rare earth minerals property located at Bokan Mountain in Alaska (an NI-43-101 technical report was filed on SEDAR on March 14, 2013).

Rights Offering Summary

As announced on September 10, 2019, the Company is offering its Canadian and other qualifying shareholders the opportunity to participate in a R.O. and acquire additional Common Shares of the Company at an exercise price of $0.10 per Common Share.

Exercise Price: CAD $0.10
Number of Rights: One Right for every Common Share held as of the Record Date
Record Date: September 17, 2019
Mailing Date and Commencement of Exercise Period: September 20, 2019
Last day for Ineligible Holders to provide notice of intent to exercise: October 11, 2019
Expiry Date: October 23, 2019

Form 8937

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Frequently Asked Questions

Each Right entitles the holder to purchase 1 common share of Ucore at a price of CAD $0.10 per common share
Any holder who exercises their Rights in full, can request to purchase additional common shares under the offering at the rights offering price (CAD $0.10 per share)
Yes, Holders can sell or assign their Rights to another party. The Rights will trade on the TSX Venture Exchange under the symbol “UCU.RT” until Noon on the Expiry Date (Oct. 23, 2019).
Up to 284,129,859 common shares may be issued in connection with the offering. No minimum number has been set.
The funds raised under the rights offering will be used for working capital and importantly to pursue Ucore’s 3 Key Initiatives (as described in Ucore’s Sept. 10, 2019 press releases and in the Circular). Currently, Ucore has working capital to last 1 month. Ucore needs only 9.1% of the Rights to be exercised to last 12 months.
Ucore has set 3 key corporate initiatives to re-establish a North American supply chain for rare earth elements (as per Sept. 10, 2019 press releases): Component 1 - Mine: Preparation of the Bokan HREE Mine (“Bokan”) to a “Shovel Ready” Status; Component 2 - Metal: Preparation of Detailed Planning, Engineering and IP Acquisition for the Alaska Strategic Metals Complex (the “Alaska SMC”); Component 3 - Market: Strategic Development of the North American REE Market.
Currently, China controls the World market for the supply and processing of rare earth elements. The current US/China trade war puts a spotlight on the importance of domestic and allied supply sources. Rare earth elements are materials that are critical industrial materials and metals that are needed for many 21st Century technologies, including many green energy initiatives, lithium-ion batteries, electric and hybrid vehicles and national defense items.
Yes. The directors and senior officers of Ucore have reported that they expect to participate in the Offering.
A rights offering is a very cost effective way of raising capital for a company by extending an offer to all existing shareholders to see if they would like to purchase additional shares in the company. No expensive prospectus is required and no underwriting or commission fees are required to be paid to an investment dealer. A “right” is similar to a short-term in-the-money “warrant” or “stock option”. “In-the-money” means that the exercise or subscription price for the common shares is below the prevailing market price for the common shares.
If you do not exercise your Rights, they will become null and void as of the expiry time (Oct. 23, 2019 at 5 PM EDT) and they will be removed from your investment account shortly thereafter as they will have no value.
Yes. If you exercise your Rights in full (and thereby fully satisfy your “basic subscription privilege”), you can request to purchase additional common shares at the same price per share (CAD $0.10). This is called the “additional subscription privilege”. The additional subscription privilege is available to any holder of Rights that fully exercises all of their Rights and who would like to subscribe for common shares not subscribed for by the holders of other Rights. The additional subscription privilege does not change the size of the Rights Offering, it simply allows holders to subscribe for the shares associated with Rights that expire unexercised. Each holder of a Right is entitled to receive, upon the exercise of the additional subscription privilege, the number of common shares equal to the lesser of: (A) the number of common shares subscribed for by the holder under the additional subscription privilege, and (B) the number calculated in accordance with the following formula (thereby providing a pro-rata allocation): x(y/z) where: x = the aggregate number of common shares available through unexercised Rights after giving effect to the basic subscription privilege; y = the number of rights exercised by the holder under the basic subscription privilege; z = the aggregate number of Rights exercised under the basic subscription privilege by holders of the rights that have subscribed for common shares under the additional subscription privilege.
Beneficial holders (who hold their Rights through an investment dealer, broker or financial intermediary) will have the funds debited from their investment account at their brokerage firm. Beneficial holders will need to speak with their investment advisor or stock broker and provide them with specific instructions to exercise the Rights and pay for the new common shares. Registered shareholders will need to send a certified cheque, bank draft or money order along with the completed rights offering certificate to Computershare.
The Rights Offering is only open to residents in all provinces and territories of Canada and to all jurisdictions outside Canada, excluding any jurisdictions that do not provide a prospectus exemption substantially similar to the rights offering exemption provided in Canada or that otherwise require obtaining any approvals of a regulatory authority in such jurisdiction or the filing of any document by the Company in such jurisdiction in connection with this offering.
Beneficial Holders will receive a Notice by email or by mail depending on the instructions they have on file with their brokerage firm. Registered Holders will receive a rights certificate and a Notice in the mail.
A Registered Shareholder outside of Canada who wishes to exercise Rights, and who is resident in a jurisdiction where the Rights Offering and the distribution and exercise of Rights is lawful and is exempt from any prospectus or similar filing requirement, must notify Computershare or Ucore in writing on or before October 11, 2019 if such holder or beneficial holder wishes to participate in the Rights Offering. In order to participate in the Rights Offering, such holder will be required to satisfy Ucore that the Rights Offering and the subscription by such holder for Ucore’s common shares pursuant to the Rights Offering is lawful and in compliance with all securities and other laws applicable in the jurisdiction where such holder is resident and would not require the Corporation to file any documentation, make any application, or pay any payment of any nature whatsoever. Such assurances may require delivery of an opinion of counsel. A Registered Shareholder that is outside of Canada and is a direct or indirect holder with an address of record in the United States and who is also an “accredited investor” within the meaning of Rule 501(a) of Regulation D (“Regulation D”) promulgated under the U.S. Securities Act (“U.S. Accredited Investor”) in a manner that satisfies, in Ucore’s sole discretion, the requirements of Rule 506(c) of Regulation D, which may require the Shareholder to provide to us all or any combination of: (a) an Internal Revenue Service Form that reports such Shareholder’s income for the most recent two years; (b) bank statements and other statements of securities holdings, certificates of deposit or tax assessments; (c) a consumer report from a United States nationwide consumer reporting agency; (d) written confirmation from a United States registered broker-dealer, an investment adviser registered with the SEC, a licensed United States attorney or an accountant as to whether such Shareholder is a U.S. Accredited Investor; (e) any other information we deem necessary to confirm the Shareholder’s status as a U.S. Accredited Investors in order to comply with Rule 506(c) of Regulation D, may have its Rights Certificates issued and forwarded by Computershare upon direction from Ucore. However, Ucore in its sole discretion reserves the right to determine such holder’s eligibility and to issue the Rights Certificates to such holders. A beneficial holder of Common Shares that holds its Common Shares through a broker or other intermediary located in a jurisdiction other than Canada and who believes the purchase of Common Shares pursuant to the Rights Offering is lawful and in compliance with all securities and other laws applicable in its jurisdiction and wishes to participate in the Rights Offering should contact its broker or intermediary as soon as possible to ensure that the requirements to participate in the Rights Offering can be and are satisfied prior to the deadline (Oct. 11, 2019). Unless otherwise agreed and acknowledged by Ucore, payment of the Subscription price to Computershare along with the completion of Form 1 on the Rights Certificate will constitute a representation to Computershare and Ucore that the offering to and subscription by the subscriber of Rights Shares pursuant to this Rights Offering is lawful and in compliance with all securities and other laws applicable in the jurisdiction where such subscriber is resident and would not require Ucore to file any documentation, make any application or pay any payment of any nature whatsoever.
At the time of the announcement of the Rights Offering (Sept. 10, 2019), the exercise or subscription price was equal to approximately a 57% discount to the volume weighted average trading price of the Company’s common shares for the 5-day trading period ending on September 10, 2019. The Company has offered this steep discount to the prevailing market price as an incentive for shareholders to exercise their Rights.
Eligible holders (i.e. Canadian residents) who exercise their Rights will not be subject to a hold period. Common shares issued from the Rights Offering will be freely tradeable. Ineligible holders who qualify to become eligible or approved to exercise their Rights and do so, may be subject to a hold period as a result of an applicable prospectus or registration exemption that was utilized in order to deliver the Rights or Rights Shares to such ineligible holder. This hold period will depend upon the jurisdiction where the holder resides and the prospectus exemption utilized. For example, US laws will likely require a hold period. This can be discussed with the Company and its legal counsel.

Cautionary Notes and Disclaimers

This web page includes certain statements that may be deemed “forward-looking statements”. All statements on this web page (other than statements of historical facts) that address future business development regarding Ucore’s Bokan Project and the development of a US domestic mine-to-metal-market supply chain for American heavy rare earth elements (“HREE”) independence and/or any implied acquisition activities (including any related required financings), timelines, litigation outcomes, events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance or results and actual results or developments may differ materially from those in forward-looking statements. Ucore has assumed that it will be able to procure a solvent extraction (“SX”) partner or SX supplier for the planned Alaska Strategic Metals Complex (“Alaska SMC”) (a downstream multi-product processing facility). Ucore has also assumed that sufficient external funding will be found to develop the specific engineering plans for the Alaska SMC and its construction. Ucore has also assumed that it will in the near future be able to obtain interim financing and sufficient additional financing to acquire IBC Advanced Technologies, Inc. (“IBC”) in compliance with the terms contemplated in the existing agreements with IBC and its shareholders holding a majority of its shares. Ucore has also assumed that there will be no material adverse findings in its upcoming expected comprehensive due diligence review of IBC. Factors that could cause actual results to differ materially from those in forward-looking statements include: Ucore not being able to procure an SX partner or supplier for the Alaska SMC; Ucore not being able to raise sufficient funds to fund the specific design and construction of the Alaska SMC and/or acquire IBC (including the non-acquisition payments owed under the previous and existing agreements with IBC); adverse capital market conditions; unexpected due diligence findings; unexpected or adverse outcomes in the currently outstanding litigation matters between Ucore and IBC; resistance to or noncompliance by IBC or its key shareholders with the existing agreements; the emergence of alternative superior metallurgy and mineral separation technologies; the inability of IBC to retain its key staff members and clients; the inability of IBC to protect its intellectual property; unexpected transaction costs or other deal completion setbacks; a change in the legislation in Alaska and/or in the support expressed by AIDEA regarding the development of Bokan; the availability and procurement of any required interim and/or long-term financing that may be required; and general economic, market or business conditions.

This website is not intended to be an “offering memorandum” as defined under section 1(1) of the Securities Act (Ontario) since this web page is a document setting out some current information about Ucore for the benefit of Ucore’s currently existing shareholders who are inherently familiar with Ucore through their prior investment and/or business contacts.  For more information about Ucore Rare Metals Inc., please see the information that is available on SEDAR (www.sedar.com).  Please also see the risk disclosures that are found in Ucore’s most recent Management Discussion & Analysis document (filed on August 29, 2019).  For more information about Ucore’s rights offering, please see the Rights Offering Circular (filed on September 10, 2019). 

For more information about Ucore’s mineral resources and related technical information regarding the Bokan Project, please see Ucore’s NI 43-101 technical report (a preliminary economic assessment) filed on SEDAR on March 14, 2013 and Ucore’s mineral resource update filed on SEDAR on May 11, 2015.  Information about the quantity and grades of the indicated and inferred mineral resources are described in these documents and are incorporated by reference herein.  Mineral resources that are not mineral reserves do not have demonstrated economic viability. 

Qualified Person:  Michael Schrider, P.E., COO of Ucore, has approved the scientific and technical content of this web page and is the Qualified Person responsible for its accuracy. Mr. Schrider, is a registered professional engineer in the State of Louisiana, holds a B.S. degree in engineering from the University of New Orleans and a M.Eng. degree in mining engineering (mineral processing emphasis) from The University of Arizona. 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined by the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this web page.

 

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