TORONTO, Dec. 10, 2018
/CNW/ - Desert Lion Energy Inc. (TSXV: DLI) (OTCQB: DSLEF)
("Desert Lion" or the "Company") is pleased to
announce it has successfully closed the initial tranche of secured
convertible promissory notes (the "Notes") for gross
proceeds of $5,000,000 with AIP Asset
Management ("AIP") and has concurrently closed a
non-brokered private placement of 28,582,143 units ("Units")
at a price of $0.07 per Unit for
gross proceeds to the Company of approximately $2,000,000 (the "Private Placement").
The Company is also pleased to announce that, as a result of
strong investor demand, it has increased the size of the Private
Placement and, subject to approval of the TSX Venture Exchange
("TSXV"), plans to close a second tranche of Units for
additional gross proceeds to the Company of $1,000,000.
Of the gross proceeds of the Notes, $4,000,000 may be converted into common shares of
the Company at a price of $0.20 per
share (the "Conversion Price") at any time prior to maturity
with the balance of $1,000,000 to be
repaid to AIP on maturity in cash. The Notes will mature on
December 7, 2020 and are secured
against all of the assets of the Company and its subsidiaries. The
Notes will bear interest at a rate of 12% per annum with 8% settled
in cash and 4% settled by the issuance of common shares. Interest
will reduce to 8% per annum with all interest settled in cash or
shares, as determined by the Company, where the closing price of
the Company's common shares on the TSXV is at or above the
Conversion Price on the last trading day of any month.
Interest accrued in connection with the Notes shall be payable
monthly in cash or through the issuance of common shares at the
prevailing market price of the common shares on the TSXV at the
time of issuance. A second tranche of Notes for gross proceeds
of $5,000,000 is also available to
the Company under the Note Purchase Agreement with AIP to fund
acquisitions as mutually agreed by AIP and the Company.
Each Unit issued in the Private Placement is comprised of one
common share of the Company and one-half of one common share
purchase warrant (a "Warrant"). Each whole Warrant will
entitle the holder thereof to acquire one additional common share
of the Company at a price of $0.20
until December 7, 2020.
"AIP's investment of $5,000,000,
with an additional $5,000,000
available for potential acquisitions, $2,000,000 from equity investors as well as the
additional demand from existing shareholders and other investors
reiterates management's belief in the potential for the Desert Lion
Energy project," commented Tim
Johnston, CEO of Desert Lion Energy Inc. "The financing will
allow us to continue to build upon the excellent results recently
published in the PEA and support initiatives for strategic growth
as we develop a world class lithium company."
"AIP invests in companies with strong management teams, world
class assets and large upside growth potential. This strategy used
by AIP Global Macro Fund LP has resulted in an average return of
over 40% per year since 2014. We are highly selective of management
teams and the companies we work with and we are proud to announce
that Desert Lion was able to meet these requirements," commented
Jay Bala, Senior Portfolio Manager
of AIP Asset Management.
The Company paid a cash facility fee to AIP of $150,000 and, on a shares-for-debt basis, has
settled the $200,000 closing fee by
the issuance to AIP of 2,857,142 common shares of the Company at a
deemed price of $0.07 per share.
Pella Ventures Limited ("Pella"), a company controlled by
Adonis Pourourlis (Chairman of the board of the Company), has
participated in the Private Placement as a subscriber for 7,142,857
Units for proceeds of $500,000.
Pursuant to Multilateral Instrument 61-101 - Protection of Minority
Security Holders in Special Transactions ("MI 61-101"), the
subscription for Units by Pella constitutes a "related party
transaction" as Pella is a related party of Desert Lion as it is
controlled by Adonis Pouroulis, Chairman of the board of Desert
Lion. The Company is relying on an exemption from the formal
valuation and minority shareholder approval requirements of MI
61-101 pursuant to exemptions contained in sections 5.5(a) and
5.7(1)(a) of MI 61-101 on the basis that the value of the
subscription is less than 25% of the Company's market
capitalization.
Concurrently, Stephen Theron has
resigned as a director of the Company effective immediately. The
Company thanks Mr. Theron for his services and wishes him well in
his future endeavors.
About Desert Lion Energy
Desert Lion Energy is an
emerging lithium development company focused on building
Namibia's first large-scale
lithium mine to be located approximately 210 km from the nation's
capital of Windhoek and 220 km
from the Port of Walvis Bay. The Company's Rubicon and Helikon
mines are located within a 301 km2 prospective land
package. The project site is accessible year-round by road and has
access to power, water, rail, port, airport and communication
infrastructure.
About AIP Asset Management
It is a well-recognized,
award-winning asset management firm. Most recently, it took home
the 2017 Hedge week Award for Best Macro Hedge Fund and in 2014, it
was nominated for the Ernst and Young Entrepreneur of the Year
Award – the world's most prestigious business award for
entrepreneurs. Its core focus is to help clients, be they
institutions, hedge funds, mutual funds, family offices, or retail
investors, achieve their investment goals.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking information" within
the meaning of applicable securities laws. Generally, any
statements that are not historical facts may contain
forward-looking information, and forward-looking information can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget"
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or indicates that certain actions, events or results
"may", "could", "would", "might" or "will be" taken, "occur" or "be
achieved." Forward-looking information includes, but is not limited
to, statements and expectations regarding the closing of the
Offering and the timing thereof. Forward-looking information is
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking
information.
Although the Company has attempted to identify important
factors that cause results not to be as anticipated, estimated or
intended, there can be no assurance that such forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. Forward-looking information is made
as of the date of this presentation and the Company does not
undertake to update or revise any forward-looking information this
is included herein, except in accordance with applicable securities
laws.
NEITHER 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 RELEASE
SOURCE Desert Lion Energy
