Alphamin Completes Offering of US$31 Million of Shares for Prepayments of Debts and Signs Amended Credit Facility Agreement
May 14 2020 - 4:34PM
Alphamin Resources Corp. (AFM:TSXV, APH:JSE AltX,
“
Alphamin” or the “
Company”) is
pleased to announce that it has completed its previously announced
offering of common shares pursuant to which an aggregate of
312,319,539 common shares were issued (approximately US$31.01
million) (the “
Offering”).
The Company issued for cash on a non-brokered
private placement basis 100,819,541 common shares at a price of
C$0.14 for gross proceeds of approximately C$14,114,736
(approximately US$10.01 million). Of this amount, 60,428,571 common
shares (approximately US$6 million) were acquired by the Company’s
major shareholder, Tremont Master Holdings
(“Tremont”). Directors and officers of Alphamin
and their associates and affiliates acquired a further 4,673,755
common shares. The Company also completed concurrent shares for
debt transactions of C$29,610,000 (approximately US$21 million)
that resulted in the issuance of 211,499,998 additional common
shares at a deemed price of C$0.14 per share. Of this amount,
191,357,143 common shares were issued to Tremont for the assignment
and transfer by Tremont to Alphamin of US$19 million of the amount
owning to Tremont under the senior secured credit facility (the
“Credit Facility”) made to Alphamin’s 80.75%
subsidiary, Alphamin Bisie Mining S.A. (“AFM”). A
further 20,142,856 common shares were issued to arm’s length
third-party creditors of AFM under similar debt settlements.
Tremont, based in Grand Baie, Mauritius,
acquired direct ownership of 251,785,714 common shares under the
Offering. Prior to the Offering, Tremont directly owned 420,881,510
common shares and warrants exercisable to acquire a further
100,350,245 common shares of the Company. Following the Offering,
Tremont now owns 672,667,224 common shares, representing
approximately 57.09% of the number of issued and outstanding common
shares, as well as warrants to acquire up to a further 100,350,245
common shares of the Company. Assuming the exercise of all
warrants by Tremont only and no other exercises, Tremont would own
up to approximately 60.45% of the number of common shares of the
Company on a partially diluted basis. Tremont has advised that they
have acquired the common shares in the Offering for investment
purposes and may, depending on the market and other conditions,
increase or decrease its beneficial ownership of securities of the
Company, whether in the open market, by privately negotiated
agreements or otherwise, subject to general market conditions and
other available investment and business opportunities.
As a result of the participation of Tremont and
other insiders of Alphamin in the Offering, the Offering was
considered to be a “related party transaction” under Multilateral
Instrument 61-101 (“MI 61-101”) and TSX Venture Exchange Policy 5.9
(“Policy 5.9”). The Offering was exempt from the formal valuation
and minority shareholder approval requirements of MI 61-101 and
Policy 5.9 however, as neither the fair market value of the
securities issued to insiders nor the consideration for such
securities exceeded 25% of Alphamin’s market capitalization as
calculated in accordance with MI 61-101 and Policy 5.9. The
participants in the Offering and the extent of such participation
were not finalized until shortly prior to the completion of the
Offering. Accordingly, it was not possible to publicly disclose
details of the nature and extent of related party participation in
the Offering at least 21 days prior to the completion date.
The Offering was undertaken in connection with
certain amendments to the Credit Facility detailed in the Company’s
press release dated April 27, 2020 which are now effective pursuant
to an amended and restated credit agreement among the parties. The
amendments will reduce debt service costs, reduce mandatory debt
repayments and provide more favourable financial covenants moving
forward. The completion of the Offering resulted in the prepayment
of US$31.2 million in principal under the Credit Facility, with
US$19 million settled under the shares for debt transaction with
Tremont and a further US$12.2 million prepaid from the net proceeds
of the private placement and existing cash resources.
As partial consideration for the amendments to
the Credit Facility, Alphamin issued to two arm’s length lenders,
Sprott Private Resource Lending (Collector), L.P. and Barak Fund
SPC Limited, an aggregate of 2,014,284 common shares at a deemed
price of C$0.14 per share (“Bonus Shares”). The
Bonus Shares and all shares issued under the Offering are subject
to a 4 month hold period in Canada expiring on September 14, 2020.
No finder’s fees were paid in connection with the Offering.
The securities described in this press release
have not been, and will not be, registered under the U.S.
Securities Act of 1933, as amended (the “U.S. Securities
Act”) or any U.S. state securities laws, and may not be
offered or sold in the United States or to, or for the account or
benefit of, United States persons absent registration or any
applicable exemption from the registration requirements of the U.S.
Securities Act and applicable U.S. state securities laws.
FOR MORE INFORMATION, PLEASE CONTACT:
Maritz
Smith
CEO
Alphamin Resources
Corp.
Tel: +230 269 4166E-mail: msmith@alphaminresources.com
Neither the TSX Venture Exchange nor its
regulation services provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
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