21:07:46 EDT Thu 28 Mar 2024
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or Name
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CA



Marengo Mining Ltd (2)
Symbol MRN
Shares Issued 1,137,870,521
Close 2014-12-22 C$ 0.01
Market Cap C$ 11,378,705
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Marengo closes $7.5-million (U.S.) debenture financing

2014-12-22 18:47 ET - News Release

Mr. Pieter Britz reports

MARENGO ANNOUNCES CLOSING OF FINANCING TRANSACTION WITH ITS MAJOR SHAREHOLDER

Marengo Mining Ltd. has completed the previously announced issuance of $7.5-million (U.S.) principal amount of convertible unsecured debentures to its major shareholder, Sentient Executive GP IV Ltd., acting as the general partner of Sentient GP IV LP, itself acting as the general partner of Sentient Global Resources Fund IV LP, pursuant to a debenture purchase agreement dated Nov. 14, 2014, between the company, its wholly owned subsidiaries, Yandera Mining Company Ltd. and Marengo Mining (PNG) Ltd., and Sentient.

The debentures will mature on June 30, 2017, and bear interest from and including the date of issuance at the rate of 9 per cent per annum, payable on the maturity date. The debentures are convertible, at the option of Sentient, into common shares or Chess Depositary Interests (CDIs) of the company at a conversion price of one cent per common share or CDI. The conversion price of the debentures will be adjusted in the event there is a reorganization of capital or an issue of new common shares below the conversion price.

The debentures were jointly issued by the company and the Papua New Guinea subsidiaries, and are guaranteed by Marengo Mining (Australia) Ltd. and Yandera Mining Company (Holdings) Pty. Ltd. (both wholly owned subsidiaries of the company). The conversion price for existing outstanding debentures of the company held by Sentient pursuant to the terms of prior debenture financings between the company and Sentient completed earlier this year were also adjusted to one cent per common share or CDI.

Sentient and its related entities currently hold approximately 22 per cent of the issued and outstanding common shares of the company and would hold approximately 88 per cent of the common shares of the company, assuming the conversion of all the debentures issued in connection with the transaction and the conversion by Sentient of all debentures issued and issuable pursuant to the prior financings.

The transaction received disinterested shareholder approval at the annual and special meeting of shareholders of the company held on Dec. 18, 2014, and is subject to final approval of the Toronto Stock Exchange.

The use of proceeds will primarily be for a new drilling program, operations, working capital and general corporate purposes. The company has previously described efforts to increase geological knowledge of the site and is pleased to report that this work has resulted in the identification of drilling targets which the company will now pursue. Marengo has identified a new prospect named Rima that is located due west of the Yandera Central deposit, following an extensive mapping and rock-chip sampling program. The company initiated a 10-hole drill program on Nov. 11, 2014, to test the mineralization and has completed more than 950 metres of diamond core drilling since. No assay results are available yet, but will be announced separately as and when they become available, which is expected to be in early 2015. Identification and mapping of further prospective areas of EL1335 are set to continue as part of the continuing assessment of the mineral potential of the core Yandera tenement.

We seek Safe Harbor.

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