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The Board of Directors of Bluelake Mineral AB (publ) ("Bluelake Mineral" or the "Company") has today, with the support of the authorisation from the annual general meeting on 12 May 2022, decided to carry out a rights issue of a maximum of 2,645,801 units (the "Rights issue"). One (1) unit consists of ten (10) shares and five (5) warrants. The subscription price is SEK 10.00 per unit (equivalent to SEK 1.00 per share), which means that the Company, upon full subscription in the Rights Issue, can receive proceeds of a maximum of approximately SEK 26.5 million, before the exercise of warrants and issue costs. For each (1) existing share in the Company, one (1) unit right is received. Twenty-one (21) unit rights entitle the holder to subscribe for one (1) unit. The subscription period starts on 21 March 2023 and ends on 4 April 2023. The Board of Directors has also, subject to approval at the Extraordinary General Meeting to be held on 29 March 2023, decided on a directed issue of convertibles for a total nominal amount of SEK 8.0 million to Formue Nord Fokus A/S. As part of the agreement regarding the convertible loan, Formue Nord Fokus A/S will receive 4,000,000 warrants of the same series as the warrants issued in the rights issue. The net proceeds from the Rights issue, warrants and convertibles will be used to finance the permit processes in Joma and Stekenjokk-Levi, project development in Rönnbäcken, repayment of outstanding loans, as well as overhead and contingency costs. The Rights issue is secured to approximately SEK 19.8 million, corresponding to approximately 75.0 per cent, by underwriting commitments.

Summary of the terms

• Upon full subscription in the Rights issue, Bluelake Mineral will receive gross proceeds of approximately SEK 26.5 million, before exercise of warrants and issue costs. In the event of full utilisation of the warrants, including the warrants issued to Formue Nord Fokus A/S, the Company can receive additional proceeds of approximately SEK 20.7 million, assuming full subscription in the Rights issue.
• The subscription price in the Rights issue is SEK 10.00 per unit, corresponding to SEK 1.00 per share (the warrants are obtained free of charge).
• For each (1) existing share held on the record date, one (1) unit right is received in the Rights issue. Twenty-one (21) unit rights entitle the holder to subscribe for one (1) unit. One (1) unit consists of ten (10) shares and five (5) warrants of series TO3.
• The record date is 17 March 2023, which means that the last day of trading in the Company's share including the right to participate in the Rights issue is 15 March 2023, and the first day of trading in the Company's shares excluding the right to participate in the Rights issue is 16 March 2023.
• The subscription period in the Rights issue starts on 21 March 2023 and ends on 4 April 2023. Trading in unit rights starts on 21 March 2023 and ends on 30 March 2023.
• Each (1) warrant will entitle the holder to subscribe for one (1) new share at a subscription price of SEK 1.20 per share during the period ranging from 15 April 2024 to 26 April 2024.
• The Rights issue is secured to approximately 75.0 per cent (equivalent to approximately SEK 19.8 million) by underwriting agreements.
• The net proceeds from the rights issue are intended to be used for financing a zoning plan and environmental permit in Joma (approximately SEK 5.9 million), exploitation concessions and environmental permits in Stekenjokk-Levi (approximately SEK 4.9 million), project development in Rönnbäcken (approximately SEK 2.9 million), partial repayment of outstanding loans including interest (approximately SEK 6.0 million), as well as overhead and contingency costs (approximately SEK 1.9 million). The net proceeds from the convertible issue of approximately SEK 7.4 million are intended to be used for partial repayment of outstanding loans including interest. The net proceeds from the warrants are intended to be used for continued financing of the permitting processes in the Company's projects as well as overhead and contingency costs.
• The Board of Directors of the Company will apply for admission to trading of the new shares and warrants on NGM Nordic SME.

Background and motive in brief

Bluelake Mineral is a Company focused on exploration and mining development in the Nordics within base metals, mainly copper, zinc and nickel. The Company's main projects consist of the copper-zinc projects Stekenjokk-Levi and Joma, as well as the nickel project Rönnbäcken. The Company's medium term objective is to put at least one mine into operation or sell the corresponding project to an industrial buyer creating substantial shareholder value. In addition, the Company strives to build a broad portfolio of first-class base metal projects, which have the potential to result in the start of mining operations.

On 2 November 2022, the previously granted Natura 2000-permit for mining operations in Stekenjokk-Levi became legally binding. The Company has since instructed the Mining Inspectorate (Bergsstaten) to promptly complete the processing and decision regarding the Company's application for exploitation concessions in the project. According to a preliminary economic assessment (PEA) carried out in 2022, the inferred mineral resources amount to approximately 11.8 million tonnes with 0.9 per cent copper and 2.2 per cent zinc. The Company assesses the project as financially viable and sustainable with potential of producing a high quality copper and zinc concentrate to the European electric vehicle and battery industry as well as other sectors for an extended period of time.

At the beginning of 2022, the Company increased its ownership in the subsidiary Joma AS from 75 to 100 percent, giving the Company full control over the project in Joma. The Joma deposit is a historical underground mine that was in production from 1972 to 1988, with Cu-Zn mineralization of Caledonian volcanogenic massive sulphide style. Joma is geographically located close to Stekenjokk-Levi, which the Company believes can provide synergies regarding enrichment and landfill. The project has been granted a exploitation concession after which the Company has worked through its subsidiary with the permit process to obtain an approved zoning plan. A preliminary economic assessment estimates indicated mineral resources of approximately 6 million tonnes with 1.00 per cent copper and 1.66 per cent zinc.

During February 2022, the consulting company SRK Consulting completed a PEA of the Company's project in Rönnbäcken, showing estimated measured and indicated mineral resources of 600 million tons with 0.18 per cent nickel, which would make Rönnbäcken the largest undeveloped nickel resource in Europe. The economic assessment predicts a possible production volume averaging 23,000 tons of nickel per year over the initial 19 years of full production of the 20 years Life of Mine (LoM). With current nickel prices, the Company evaluates that the project has strong financial prospects for creating shareholder value in addition to having a strategic value as an extensive nickel deposit in Europe.

The Company assesses that there are good conditions for value-creation in the project portfolio. In the coming year, the Company plans to continue working with permitting in Stekenjokk-Levi and Joma. A former Norwegian minister has been recruited as a strategic advisor to assist in processes around the zoning plan in Joma. After a potential approval of the zoning plan, the work will continue with an application for an environmental permit. In Stekenjokk-Levi, the focus is to receive a decision on the Company's application for exploitation concessions as soon as possible, and then focus on the application for an environmental permit. In Rönnbäcken, project development will be carried out in anticipation of larger strategic opportunities and decisions.

With respect to the development plans outlined above, the Board of Directors of Bluelake Mineral has decided to carry out a Rights issue of units of approximately SEK 26.5 million. The net proceeds from the Rights issue are intended to be used for the following purposes:

• Joma - SEK 5,9 million for financing a zoning plan and environmental permit.
• Stekenjokk-Levi - SEK 4,9 million for financing exploitation concessions and environmental permits.
• Rönnbäcken - SEK 2,9 million for project development.
• Company operations - SEK 1,9 million for overhead and contingency costs.
• Loans - SEK 6,0 million for partial repayment of outstanding loans including interest.

The net proceeds from the convertible issue of approximately SEK 7.4 million are intended to be used for partial repayment of outstanding loans including interest.

The net proceeds from any exercise of the associated warrants are intended to be used for continued financing of the permitting processes and project development in the Company's projects, as well as overhead and contingency costs.

Rights issue

The Board of Directors of Bluelake Mineral has today, on 9 March 2023, with the support of the authorisation from the Annual General Meeting on 12 May 2022, decided to carry out a rights issue of a maximum of 2,645,801 units (26,458,010 shares and 13,229,005 warrants of series TO3) with preferential rights for existing shareholders.

• Anyone who is registered as a shareholder in Bluelake Mineral on the record date, 17 March 2023, will receive one (1) unit right for every (1) existing share. Twenty-one (21) unit rights entitle the holder to subscribe for one (1) unit. One (1) unit consists of ten (10) shares and five (5) warrants of series TO3.
• The last day of trading in the Company's share including the right to participate in the Rights issue is 15 March 2023. The first day of trading in the Company's share excluding the right to participate in the Rights issue is 16 March 2023.
• The unit rights will be traded on NGM Nordic SME from 21 March 2023 to 30 March 2023.
• Trading in interim units (BTU) is expected to take place from 21 March 2023 until the shares and warrants in the Rights issue have been registered with the Swedish Companies Registration Office.
• The subscription price in the Rights issue is SEK 10.00 per unit, corresponding to SEK 1.00 per share (the warrants are obtained free of charge).
• The subscription period starts on 21 March 2023 and ends on 4 April 2023.
• The Rights issue consists of an issue of a maximum of 26,458,010 shares and 13,229,005 warrants of series TO3, implying gross proceeds of approximately SEK 26.5 million upon full subscription before any exercise of warrants.
• Each (1) warrant of series TO3 issued through the Rights issue will entitle the holder to subscribe for one (1) new share in the Company during the period from 15 April 2024 to 26 April 2024 at a subscription price of SEK 1.20 per share. Upon full subscription in the Rights issue, full utilisation of the warrants, including warrants issued to Formue Nord Fokus A/S, the Company will receive additional gross proceeds of approximately SEK 20.7 million.
• For existing shareholders who do not participate in the Rights issue the dilution will be 32.3 per cent in the case of full subscription in the Rights issue. Under the condition of full subscription in the Rights issue and full utilisation of all corresponding warrants and warrants issued to Formue Nord Fokus A/S, the maximum dilution amounts to 44.0 per cent.

Issue of convertibles

The Board of Directors has, subject to approval at the Extraordinary General Meeting intended to be held on 29 March 2023, decided on a directed issue of convertibles of SEK 8.0 million to Formue Nord Fokus A/S. As part of the agreement regarding the convertible loan, Formue Nord Fokus A/S will receive 4,000,000 warrants of the same series as the warrants issued in the rights issue. Notice to the Extraordinary General Meeting will be published through a separate press release. The main terms of the convertibles are presented below:

• The combined nominal amount of the convertibles amounts to SEK 8.0 million and entails the right to convert until 12 October 2024, at a conversion price of SEK 1.20. In the event that the Company carries out a directed issue of shares at a discount that exceeds ten (10) per cent compared to the average closing price for the Company's share during ten (10) trading days immediately prior to the resolution day of the share issue, the convertible holder has the right to, during a 10-day period, convert all convertibles at a conversion rate corresponding to the subscription price in the directed issue, however at minimum conversion rate of SEK 0.50.
• Minimum conversion amount of SEK 1.0 million per occasion.
• To the extent that conversion has not taken place, the convertible loan falls due for payment on 12 October 2024.
• The convertible carries an annual interest rate of twelve (12) per cent, to be paid on a quarterly basis and on the final due date.
• The subscription price for the convertible is 95 per cent of the convertibles total nominal value.
• Upon full conversion of the convertible and accrued interest, the share capital will increase by SEK 1,659,441 and the number of shares by 16,594,410.

The reason for the deviation from the shareholders preferential right is that the Company wishes to repay the Company's outstanding loan of SEK 9,000,000 and accrued interest, which the Company took up in December 2022 and which is due for payment on 31 July 2023, thereby replacing the outstanding loan with the convertible loan, which for the Company means, among other things, lower interest costs and extending debt financing. The Board of Directors has considered the possibility of financing the repayment of outstanding loans by carrying out a larger rights issue of shares than the Rights issue, or though a rights issue of convertibles, but have received indications from the Company's shareholders that such a rights issue would likely not be fully subscribed. Securing underwriting commitments for such a rights issue would be costly for the Company. The Board of Director's overall assessment is thus that the issue of the convertibles constitutes the most efficient financing of the repayment of the Company's loans and is beneficial for the Company and its shareholders.

The subscription price for the convertibles has been determined through negotiations with Formue Nord Fokus A/S at arm's length and is assessed by the Board of Directors - in light of the agreement - to be in line with market terms.  

Underwriting commitments

Prior to the publication of the Rights issue, a consortium of investors has provided underwriting commitments amounting to approximately SEK 19.8 million, corresponding to approximately 75.0 per cent, in the Rights issue.

The underwriting commitments entitle to an underwriting fee amounting to twelve (12) per cent in cash, implying a maximum cash cost of approximately SEK 2.4 million for the Company, or alternatively, fifteen (15) per cent in the form of units. The subscription price for the units referred to in the underwriting compensation corresponds to the subscription price in the Rights issue. This means that a further maximum of 297,675 units may be issued in the form of a directed issue to underwriters.

The underwriting commitments are not secured by bank guarantees, escrows, pledging or similar arrangements.

Indicative timetable 

Memorandum

The terms and conditions of the Rights issue will be included in the Company's information memorandum, which is expected to be published on 15 March 2023. The memorandum and subscription form will be available on the Company's website, https://www.bluelakemineral.com/en/investors/, Augment Partner AB's website, www.augment.se/offerings/, and Aqurat Fondkommissions AB's website, aqurat.se/aktuella-erbjudanden/.

Advisers

Augment Partners AB is acting as the financial advisor and Advokatfirman Schjødt is acting as the legal advisor in the transaction.

Stockholm, March 2023

Bluelake Mineral AB (publ)

The Board of Directors

Publication of information

This information is of the kind which Bluelake Mineral AB (publ) is required to disclose in accordance with the EU's Market Abuse Regulation. The information was issued for publication by contact person below, on 9 March 2023 at 17.00 CET.