Mr. Lewis Black reports
ALMONTY INDUSTRIES INC. COMPLETES FINANCING TRANSACTIONS OF $6.1-MILLION, APPOINTS THOMAS GUTSCHLAG TO ITS BOARD OF DIRECTORS, AND WOULFE MINING EXTENDS & PARTIALLY REPAYS TAEGUTEC LOAN
Almonty Industries Inc. has
completed its previously announced non-brokered private placement of a
secured convertible debenture in the principal amount of $4-million, as well as an unsecured bridge financing of
$2.1-million, for combined total gross proceeds
of $6.1-million. The terms of the debenture offering and the bridge loan
are described in Almonty's news release dated Sept. 11, 2015. All
securities issued pursuant to the debenture offering are subject to
resale restrictions for a period of four months expiring on Jan. 16,
2015. Almonty intends to use the net proceeds of the debenture offering
and the bridge loan for general corporate purposes and for the partial
repayment today of indebtedness of a subsidiary of Woulfe Mining Corp.,
a wholly owned subsidiary of Almonty, as further described herein.
Almonty will issue an additional news release upon closing of its
non-brokered private placement of common shares as described in its news
release dated Sept. 11, 2015.
In connection with the debenture offering and pursuant to the nomination
right granted to Deutsche Rohstoff AG thereunder (as
further described in Almonty's news release dated Sept. 11, 2015),
Dr. Thomas Gutschlag, the chief executive officer of DRAG, has been
appointed to the board of directors of Almonty. DRAG is a public company
listed on the Frankfurt Stock Exchange, which identifies, develops and
divests attractive resource projects in North America, Australia and
Europe, with a focus on the development of oil and gas opportunities
within the United States, as well as metals such as gold, copper, rare
earth elements, tungsten and tin. Dr. Gutschlag co-founded DRAG in 2006
and has been its chief executive officer since Jan. 1, 2015, and prior
thereto its chief financial officer. He is a qualified economist with a
degree in economics from the University of Heidelberg and a doctorate
from the University of Mannheim.
Almonty and Woulfe also announce that they have reached an agreement
today with TaeguTec Ltd. for an extension to March
31, 2016, of the existing indebtedness of Sangdong Mining Corp. to
TaeguTec (in the outstanding principal amount of approximately $11.33-million) previously due on Sept. 15, 2015, subject to $5.00-million thereof being repaid from the proceeds of the debenture offering
and the bridge loan on Sept. 15, 2015, which partial repayment has
been made today.
The debenture offering constitutes a related-party transaction within
the meaning of Multilateral Instrument 61-101 (protection of minority
securityholders in special transactions). For
this transaction, Almonty relied on the exemption from the formal
valuation requirements of MI 61-101 contained in Section 5.5 (b) of MI
61-101 and on the exemption from the minority shareholder approval
requirements of MI 61-101 contained in Section 5.7 (1) (a) of MI 61-101.
DRAG early warning disclosure
DRAG acquired ownership and control of the debenture, which is
convertible at the option of DRAG into common shares of Almonty at a
conversion price of 81 cents per share (and at the option of Almonty at the same conversion price if Almonty raises at least $22.5-million in equity capital pursuant to another offering).
DRAG has advised Almonty that, at present, it also owns and controls
12,209,302 common shares of Almonty, representing approximately 14.1 per cent of
the issued and outstanding common shares of Almonty (being 86,600,419
shares), and it also owns another convertible debenture of Almonty in
the principal amount of $6-million having a maturity of 2.5 years with a coupon of 4 per cent, and being
convertible at the option of DRAG into common shares of Almonty at a
conversion price of $1.45 per share.
In the event that the principal amount of the debenture was converted,
DRAG would have ownership and control of an additional 4,938,271 common
shares of Almonty, representing approximately 5.4 per cent of the then issued
and outstanding common shares of Almonty postexercise, and ownership
and control over a total of 17,147,573 common shares of Almonty,
representing approximately 18.7 per cent of the then issued and outstanding
common shares of Almonty postexercise.
In the event that the principal amount of the existing debenture was
converted in full, and assuming the conversion of the debenture, DRAG
would have ownership and control of an additional 4,137,931 common
shares of Almonty, representing approximately 4.3 per cent of the then issued
and outstanding common shares of Almonty postexercise, and ownership
and control over a total of 21,285,504 common shares of Almonty,
representing approximately 22.3 per cent of the then issued and outstanding
common shares of Almonty postexercise.
DRAG has advised Almonty that it acquired the debenture for investment
purposes and has no present intention to acquire further securities of
Almonty, although it may in the future acquire or dispose of securities
of Almonty, through the market, privately or otherwise, as circumstances
or market conditions warrant.
A copy of the early warning report required to be filed by DRAG with
applicable securities commissions in connection with this acquisition
will be available for viewing under Almonty's profile on SEDAR,
and a copy of the early warning report may also be obtained by
contacting Dr. Gutschlag, the chief executive officer of DRAG, at
Friedrich-Ebert-Anlage 24 DE-69117, Heidelberg, Germany, telephone 49-6221-871-000.
We seek Safe Harbor.
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