Western Magnesium Corporation announced a private placement of 15% unsecured convertible debentures due October 14, 2023, for gross proceeds of $3,000,000 on April 14, 2022. The company has signed securities purchase agreement for the transaction. The debentures bear interest at the rate of 15% per annum, matures on October 14, 2023, and is convertible into common shares at $0.30 per share. In addition, upon each conversion of the debentures, the holder is entitled to receive a warrant to purchase common shares equal to 100% of the conversion shares being issued on such conversion. The initial exercise price per warrant share shall be $0.40 with expiry period of 5 years. In event of default debentures, the interest rate shall increase to the lesser of 20% per annum or the maximum rate permitted under applicable law until paid. The debentures are redeemable and unsecured. The debentures will be issued pursuant to exemptions provided under Regulation D. The transaction is expected to close on or before April 25, 2022. The completion of the private placement and payment of any commission and fees remain subject to the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The securities issued will be subject to a statutory hold period in Canada for a period of four months and one day from the closing. The securities have not been registered with the SEC and are also subject to a statutory six-month hold period in compliance with Regulation S.

On April 14, 2022, the company issued debentures for gross proceeds of $2,000,000 in first tranche to one investor. Upon conversion of debentures, warrants will be issued to purchase 6,666,667 common shares $0.40 per share expiring on April 14, 2027.