What is the intended use of the $262,099.98 proceeds from the private placement?

Intended use of the $262,099.98 proceeds

Collective Metals’ filing does not spell out a specific allocation, but the size and structure of the private‑placement (4.37 million units at $0.06 each, each unit pairing a share with a 24‑month $0.08 warrant) are typical of a capital‑raising round aimed at working‑capital and near‑term exploration or development needs. For a junior‑metal explorer with a modest market cap, a CAD ≈ 260 k cash infusion is generally earmarked for:

1. Funding current drilling, sampling or metallurgical test work on its existing projects so that the company can advance toward a resource‑definition or a next‑stage technical report.
   
2. Covering operating expenses and general corporate costs (paying staff, maintaining the Vancouver office, and meeting regulatory filing requirements) while the company remains pre‑cash‑flow.
   

Because the placement is “non‑brokered” and priced at a deep discount to the current share price, the capital is being raised quickly and cheaply, suggesting the company wants to shore up its balance sheet rather than pursue a large‑scale acquisition.

Trading implications

• Dilution risk vs. upside: The issuance of 4.37 M new shares will dilute existing shareholders, but the low issue price also provides a cash buffer that could fund value‑creating work. If the proceeds are indeed used to advance a drilling program that upgrades the resource estimate, the share‑price upside could outweigh the dilution.
  
• Short‑term price pressure: Expect modest selling pressure in the days following the closing as the new shares and warrants hit the market, especially if the current float is thin.
  
• Technical cue: Look for a break‑below the recent support zone around $0.07–$0.08 (the warrant exercise price) as a possible short‑term downside trigger. Conversely, a bounce above the $0.09 resistance could signal that the market is already pricing in the anticipated exploration spend and the dilution effect is being absorbed.

Actionable take‑away: Keep the stock on a watch‑list. If the price holds above $0.08 and the company releases a concrete drill‑budget or project‑update within the next 4–6 weeks, consider a small‑position entry on a breakout to the upside. If the price slides below $0.07 on volume, it may be prudent to reduce exposure until the use of the proceeds is clarified through a forthcoming technical or operational update.