VANCOUVER, April 12, 2018
/CNW/ - Euromax Resources Ltd., (TSX: EOX; OTCQB: EOXFF):
("Euromax" or the "Company"), is pleased to announce
that it has closed its previously announced non-brokered private
placement financing for gross proceeds of CAD$5,220,000 (USD$4,000,000) (the "Private Placement").
Pursuant to the Private Placement, the Company has issued
29,000,000 units (the "Units"), each Unit consisting of one
common share in the capital of the Company (a "Common
Share") and one Common Share purchase warrant (a
"Warrant"), at an offering price of CAD$0.18 per Unit to Galena Resource Equities
Limited ("Galena"), an entity controlled by Galena Asset
Management S.A., which is an affiliate of the Trafigura Group. Each
Warrant may be exercised for the purchase of one Common Share at a
price of CAD$0.23 for a period of two
years following the closing of the Private Placement. The proceeds
of the Private Placement will be used for the development of the
Company's Ilovica-Shtuka Copper-Gold Project and for general
corporate purposes.
An Early Warning Report will be filed with the applicable
securities regulators in connection with Galena's acquisition of
Common Shares, and a copy of such report will be available on SEDAR
at www.sedar.com.
Pursuant to the requirements of the Toronto Stock Exchange, the
Company has obtained the written consent of 59.97% of its
disinterested shareholders in order to allow Galena, should it so
choose, to exercise the Warrants issued to it pursuant to the
Private Placement, which would result in it holding greater than
20% of Euromax's issued and outstanding Common Shares. Euromax's
disinterested shareholders have also provided written consent to
implement certain amendments (as described in more detail below) to
convertible debentures previously issued to CC Ilovitza Limited
("CCC") and the European Bank for Reconstruction and
Development (the "EBRD") which may result in the issuance of
an additional aggregate 21,235,218 Common Shares should the
outstanding principal amounts of such debentures be converted in
accordance with their terms. The Company entered into definitive
documentation with the debenture holders in respect of such
amendments in connection with closing of the Private Placement, as
described in more detail below.
Pursuant to an amendment agreement between the EBRD and the
Company, which amended the US$5
million convertible loan agreement dated 29 April 2016 (as amended on 20 May 2016) (the "Original EBRD Convertible
Loan Agreement", as amended by the Amendment Agreement, the
"EBRD Convertible Loan Agreement"), EBRD and the
Company agreed, amongst other things: (i) to extend the maturity
date of amounts owing to December 31,
2018 (the "Maturity Date"), (ii) to reduce the
conversion price in respect of the principal owing under the EBRD
Convertible Loan Agreement from CAD$0.40 to CAD$0.23 per share, and (iii) to amend the
interest rate to 20% per annum (compounding annually)
(collectively, the "EBRD Amendments"). As set out in
the Company's press release dated April 2,
2018, similar amendments were made to the convertible
debentures of the Company held by CCC.
EBRD currently holds 23,368,547 common shares of the Company,
representing approximately 17.17% of the Company's issued and
outstanding Common Shares, prior to the completion of the Private
Placement. As a result of the EBRD Amendments and including the
common shares of the Company already owned by EBRD, assuming (i) a
conversion by the EBRD at the Maturity Date of all amounts owing
under the EBRD Convertible Loan Agreement (including the
Outstanding Principal Amount of US$5,000,000, Accrued and Unpaid Interest, the
Prepayment Amount, and the Finance Delay Fee (as each such term is
defined in the EBRD Convertible Loan Agreement)), (ii) a conversion
price for all such amounts of CAD$0.23 per share (notwithstanding that the EBRD
Convertible Loan Agreement provides for a different conversion
price for conversion of the Accrued and Unpaid Interest, the
Prepayment Amount and the Finance Delay Fee), and (iii) a Bank of
Canada closing rate on
10 April 2018 of US$1 = CAD$1.2584,
the EBRD would acquire ownership and control over a total of
44,395,507 additional Common Shares of Euromax, with such
additional Common Shares representing 24.60% of the Company's total
issued and outstanding Common Shares, without giving effect to the
Private Placement. As a result, EBRD would own, in aggregate
(including the Common Shares it currently holds), 67,764,054 Common
Shares, representing 37.54% of the Company's total issued and
outstanding Common Shares, and representing an increase of 8.6% of
the percentage of the Company's total issued and outstanding Common
Shares which EBRD would have been entitled to own (including the
shares it currently holds) prior to the EBRD Amendments (based on
the assumptions as at today and maturity of the loan on
April 30, 2018), in each case without
giving effect to the Private Placement.
The EBRD, One Exchange Square, London, EC2A 2JN, United Kingdom, entered into the Amendment
Agreement for investment purposes. Depending on market conditions
and other factors, the EBRD may from time to time acquire and/or
dispose of securities of Euromax or continue to hold its current
position. A copy of the early warning report required to be
filed with the applicable securities commissions in connection with
the EBRD Amendments will be available on SEDAR at www.sedar.com and
can be obtained by contacting Ulmas Musaliev at +44 207 338 7224,
and Francisco Fortuny at +44 207 338
8439.
About Euromax Resources Ltd.
Euromax is a minerals development company whose corporate
strategy is centered on the development of the Ilovica-Shtuka
Project, the company's core gold and copper development project
located in Macedonia. Euromax,
through its local subsidiaries, has been involved in the
exploration and development of a number projects in south-eastern
Europe since January 2011.
About Galena Asset Management S.A.
Galena Asset Management S.A. is the wholly-owned investment arm
of the Trafigura Group, a world leading commodity trading firm, and
is authorized and regulated by the Swiss Financial Market
Supervisory Authority (FINMA). For more than a decade Galena has
operated at the intersection of financial and physical commodity
markets, enabling leading institutional investors to access
investment opportunities alongside the Trafigura Group through
funds or managed accounts. Galena's portfolio management
specialists have built considerable experience in metals, minerals,
oil, shipping and infrastructure. Galena acts independently, but
derives significant benefits from its relationship with Trafigura,
its principal anchor investor.
Galena has unparalleled access to the commercial and technical
expertise of the Trafigura Group in the non-ferrous and ferrous
space. The investment professionals have the ability to leverage
Trafigura's global presence with 61 offices in 36 countries and
rely on the Group's solid reputation. The fund invests globally and
usually intervenes actively in the strategic direction of companies
invested in. Trafigura is a limited partner in the fund.
Visit: www.galena-invest.com
Forward-Looking Information
This news release contains forward-looking information.
Forward-looking statements include, but are not limited to the use
of proceeds from the Private Placement, implementation of the
amendments to previously issued convertible debentures, the
continued advancement of the Company's general business plan and
the development of Ilovica-Shtuka, and the receipt of all necessary
government approvals and consents. When used in this press release,
the words "will", "shall", "anticipate", "believe", "estimate",
"expect", "intent", "may", "project", "plan", "should" and similar
expressions may identify forward-looking statements. Although
Euromax believes that their expectations reflected in these forward
looking statements are reasonable, such statements involve risks
and uncertainties and no assurance can be given that actual results
will be consistent with these forward-looking statements. Important
factors that could cause actual results to differ from these
forward-looking statements include the ability to implement
corporate strategies, the ability to obtain financing as and when
required and on reasonable terms, the risk that the development of
the Ilovica-Shtuka Copper-Gold Project may not proceed as
anticipated, including the inability to obtain necessary government
approvals for its activities in a timely manner, political or
economic instability in the jurisdiction in which the
Ilovica-Shtuka Copper-Gold Project is located, changes in national
and local government legislation, regulation, and taxation, and
other risks disclosed in our filings made with Canadian securities
regulators available on SEDAR at www.sedar.com. This list is
not exhaustive of the factors that may affect any of Euromax's
forward-looking statements. Investors are cautioned not to put
undue reliance on forward-looking statements. Forward-looking
statements contained herein are made as of the date of this news
release and Euromax disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
SOURCE Euromax Resources