Gran Colombia Gold Corp. (the “Company” or “Gran Colombia”)
(TSX:GCM) announced today the positive results of the Company’s
special meeting of shareholders (the “Special Meeting”) and consent
solicitations related to its previously announced proposed debt
financing (the “Offering”). With the requisite securityholder
approval and consents now received, the Company expects to complete
the closing of the Offering on April 30, 2018.
Serafino Iacono, Executive Co-Chairman of Gran
Colombia, commented, “We received a significant amount of interest
in the Offering, and to accommodate investors, including existing
holders of the Company’s Senior Secured Convertible Debentures due
2020 and 2024 (collectively, the “Senior Debentures”) who wished to
roll over their positions into the Offering, we have increased the
size of the Offering to up to 98,000 Units for aggregate gross
proceeds of up to US$98 million, maintaining our objective of
keeping a tighter level of debt on our balance sheet. This will
enable us to fully redeem the Senior Debentures at par as planned.
Any remaining cash proceeds will be used for general corporate
purposes. We have now received the requisite shareholder approval
and the requisite consent of holders of the Company’s Senior
Unsecured Convertible Debentures due August 2018 (the “2018
Debentures”) to proceed with the Offering. We have also received
the requisite consent of the holders of the Senior Debentures to
amend the 2020 and 2024 Indenture (as defined below) to eliminate
the requirement to give advanced notice prior to early redemption,
allowing us to redeem the Senior Debentures in full shortly after
the closing of the Offering, which has now been set for April 30,
2018.”
Special Meeting of
Shareholders
The detailed result of the Special Meeting which
took place on Thursday, April 19, 2018 is set out below:
SPECIAL MEETING |
Description of Matter |
Outcome |
Voted |
Voted (%) |
Approval of an ordinary resolution, the full text of which is set
forth in Schedule A of the management information circular dated
February 22, 2018, as supplemented, to approve the proposed
financing of up to 152,000 units of the Company, each unit
consisting of US$1,000 principal amount of senior secured
gold-linked notes due 2024 and 124 common share purchase warrants
of the Company, pursuant to a private placement, all as more
specifically set out in the management information circular dated
February 22, 2018, as supplemented. |
Approved |
4,851,655 For14,922 Against |
99.69%0.31% |
2018 Debenture Consent Solicitation and
Cancellation of Meeting
The holders of 85.30% of the total aggregate
principal amount of outstanding 2018 Debentures have provided their
consent for the amendment of the Amended and Restated Indenture
dated as of August 11, 2011 (as amended and restated as of January
20, 2016) governing the 2018 Debentures to permit the Offering. The
Company will increase the annual interest rate on the 2018
Debentures from 1% to 5% effective April 30, 2018, the expected
closing date of the Offering, through to the maturity of the 2018
Debentures in August. As such, the previously announced meeting of
2018 Debenture holders scheduled to take place on April 27, 2018 to
consider this matter has been cancelled.
In addition, holders of US$7,260,659 aggregate
principal amount of 2018 Debentures have elected to exchange their
2018 Debentures at the closing of the Offering for a cash payment
equal to 19% of the principal amount of their 2018 Debentures and
the remaining 81% of the principal amount settled with Common
Shares, a total of approximately 3,015,966 Common Shares based on
the conversion price of US$1.95 per Common Share.
Senior Debenture Consent
Solicitation
The holders of 76.48% of the total aggregate
principal amount of outstanding Senior Debentures have provided
their consent for the amendment of the Amended and Restated
Indenture dated as of October 30, 2012 (as amended and restated as
of January 20, 2016), and as supplemented by a Supplemental
Indenture dated as of May 12, 2017 (the “2020 and 2024 Indenture”)
governing the Senior Debentures to remove the requirement to give
advanced notice for the early redemption of the debt, to allow the
Company to expedite the redemption of the Senior Debentures shortly
after the closing of the Offering. Holders of the Senior Debentures
who have previously indicated their intention to participate in the
Offering will exchange their existing Senior Debentures to the
Units of the Offering at a rate of 1 Unit for every US$1,000
principal amount of Senior Debentures.
The Offering
The terms of the Offering remain substantially
the same as those disclosed in the Company’s press release dated
March 22, 2018. As a result of increasing the size of the Offering
to US$98 million, the only term that changed from previous
disclosure is the number of physical gold ounces that will be
placed into the gold trust account, now ranging from 15,600 ounces
in the first and second years down to 10,000 ounces in the final
year of the six-year term of the new senior secured gold-linked
notes. In addition, the total number of warrants issuable pursuant
to the Offering has increased to 12.15 million.
About Gran Colombia Gold
Corp.
Gran Colombia is a Canadian-based gold and
silver exploration, development and production company with its
primary focus in Colombia. Gran Colombia is currently the largest
underground gold and silver producer in Colombia with several
underground mines in operation at its Segovia and Marmato
Operations. Gran Colombia is continuing to focus on exploration,
expansion and modernization activities at its high-grade Segovia
Operations.
Additional information on Gran Colombia can be
found on its website at www.grancolombiagold.com and by reviewing
its profile on SEDAR at www.sedar.com.
Cautionary Statement on Forward-Looking
Information:
This news release contains "forward-looking
information", which may include, but is not limited to, statements
with respect to the Offering, including the expected timing for
closing of the Offering, the expected use of proceeds from the
Offering, the redemption of the Senior Debentures, the anticipated
impact of the Offering on the Company’s balance sheet and
anticipated business plans or strategies. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or "believes"
or variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Gran Colombia to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Factors
that could cause actual results to differ materially from those
anticipated in these forward-looking statements are described under
the caption "Risk Factors" in the Company's Annual Information Form
dated as of March 27, 2018, which is available for view on SEDAR at
www.sedar.com. Forward-looking statements contained herein are made
as of the date of this press release and Gran Colombia disclaims,
other than as required by law, any obligation to update any
forward-looking statements whether as a result of new information,
results, future events, circumstances, or if management's estimates
or opinions should change, or otherwise. There can be no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
For Further Information,
Contact:Mike DaviesChief Financial Officer(416)
360-4653investorrelations@grancolombiagold.com
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