The TSX Venture Exchange has accepted for filing documentation pertaining to a subscription agreement dated Jan. 16, 2024, between the company's subsidiary, Big Sky Milling Inc. (the subsidiary), and a non-arm's-length party (the buyer), whereby the company sold 49.9 per cent of the subsidiary.

Under the terms of the agreement, the buyer has agreed to acquire 49.9 per cent of the subsidiary in exchange for: (i) a cash payment in amount of $3.45-million for 3.45 million Class A shares of the subsidiary; (ii) advance of $5-million principal amount in the form of a secured loan; (iii) $5-million secured revolving credit facility; and (iv) a subordinated loan of $500,000 to the company.

The subsidiary's loans will mature in two years and carry an interest rate equal to the Canadian bank prime rate plus 3.80 per cent per annum, which will be paid in cash monthly. The subsidiary's loans will be secured by general security agreement issued by the subsidiary in favour of buyer and a mortgage over the real property of the subsidiary registered in favour of the buyer. The subsidiary's loans include a 2.0-per-cent commitment fee payable over the term of the loans.

The loan will mature one year from the date such loan is granted and will accrue interest at a rate of 15 per cent per annum, which will be payable on the date of maturity of the loan. The loan will be secured by a third-ranking general security agreement issued by another wholly owned subsidiary of the company. The loan includes a 3.0-per-cent commitment fee withheld from the initial disbursement.

In connection with the subsidiary's loan, the issuance of an aggregate of 3.25 million bonus warrants is accepted. Each bonus warrant entitles to holder to purchase one common share of the company at 20 cents per share for a period of two years.

For further details, please refer to the company's news releases dated Jan. 16, 2024, and Feb. 1, 2024.