HALIFAX,
NS, June 7, 2024 /CNW/ - Ucore Rare
Metals Inc. (TSXV: UCU) (OTCQX: UURAF) ("Ucore" or
the "Company") is pleased to announce amendments to, and
the extension of, certain debt agreements with Orca Holdings, LLC
("Orca").
Immediately following specified amendments and extensions to
debt arrangements between the parties, which are described in
Ucore's press release dated December 22,
2023, the Company was party to two short-term secured lines
of credit from Orca in the maximum principal amount of USD$2.0 million (the "2022 Line of
Credit") and USD$2.2 million (the
"2023 Line of Credit"), respectively. In
consideration for extending these loans to January 31, 2026, the Company issued a total of
4.4 million warrants to Orca, with each warrant entitling Orca to
acquire one common share in the capital of Ucore (a "Common
Share") at an exercise price of $0.89. These warrants were set to expire on
January 31, 2026.
Ucore and Orca subsequently agreed to increase the credit
limit under the 2023 Line of Credit to USD$3.2 million, and amend the interest
payment terms of both lines of credit, as more particularly
described in Ucore's press release dated April 26, 2024. In connection with these
amendments, the Company agreed to issue 1.3 million additional
warrants to Orca, with each warrant entitling Orca to acquire one
Common Share at an exercise price of $0.75 per share until January 31, 2026.
The parties have since agreed to further increase the
credit limit under the 2023 Line of Credit to USD$5.2 million, and further extend the
maturity dates of both lines of credit to October 1, 2026. All of the warrants that were
previously issued or issuable in connection with the 2022 Line of
Credit and the 2023 Line of Credit are deemed to have
expired or become non-issuable (as applicable) concurrently with
the effective date of the new amendments and extensions to the
lines of credit. As consideration for these changes, the Company
has agreed to issue a total of 7.7 million new Common Share
purchase warrants to Orca, with 4.4 million of these warrants
having an exercise price of CAD$0.89
per share and the remainder of these warrants having an exercise
price of CAD$0.75 per share. All of
the new warrants described in this press release will expire and
terminate on October 1, 2026, and
will contain a condition precedent to their exercise such that no
warrants shall be exercisable if such exercise would cause Orca's
ownership of Ucore, as calculated on a partially diluted basis, to
exceed 19.99% of the aggregate of the issued and outstanding Common
Shares, unless Ucore obtains prior shareholder approval in
accordance with the applicable requirements of the TSX Venture
Exchange (the "TSXV"). The issuance of these warrants is
subject to the prior review and acceptance of the TSXV.
Orca is wholly-owned by Mr. Randy
Johnson, a member of Ucore's Board of Directors. The
above-described transactions with Orca are considered to be related
party transactions within the meaning of Multilateral Instrument
61-01 Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). The transactions are
exempt from the formal valuation and minority shareholder approval
requirements of MI 61-101 since neither the fair market value of
the subject matter of, nor the fair market value of the
consideration for, the transaction, insofar as it involves
interested parties, exceeds 25% of the Company's market
capitalization.
No new insiders and no control persons will be created in
connection with the closing of the transactions contemplated by
this press release.
The above-described transactions were reviewed and unanimously
approved by the Company's Board of Directors. No special committee
was created to negotiate, review and approve the Amending
Agreements. Rather, the agreements were negotiated by the Company,
with Mr. Johnson declaring his conflict and abstaining from the
Board of Directors' deliberations. No commissions or similar fees
were paid to any person with respect to the latest amendments to
the 2022 Line of Credit and the 2023 Line of Credit. The Company
will file a material change report less than 21 days before the
expected date of the closing of the transactions since the terms of
the amendments to the debt agreements were not agreed upon in
principle until recently.
About Ucore Rare Metals
Inc.
Ucore is focused on rare- and critical-metal resources,
extraction, beneficiation, and separation technologies with the
potential for production, growth, and scalability. Ucore's vision
and plan is to become a leading advanced technology company,
providing best-in-class metal separation products and services to
the mining and mineral extraction industry.
Through strategic partnerships, this plan includes disrupting
the People's Republic of China's
control of the North American REE supply chain through the
near-term establishment of a heavy and light rare-earth processing
facility in the U.S. State of
Louisiana, subsequent Strategic Metal Complexes in
Canada and Alaska and the longer-term development of
Ucore's 100% controlled Bokan-Dotson Ridge Rare Heavy REE
Project on Prince of Wales Island in Southeast Alaska, USA.
Ucore is listed on the TSXV under the trading symbol "UCU" and
in the United States on the OTC
Markets' OTCQX® Best Market under the ticker symbol "UURAF."
For further information, please visit
www.ucore.com.
Forward-Looking Statements
This press release includes certain statements that may be
deemed "forward-looking statements." All statements in this release
(other than statements of historical facts) that address future
business development, technological development and/or acquisition
activities (including any related required financings), timelines,
events, or developments that the Company is pursuing are
forward-looking statements. Although the Company believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance or results, and actual results or developments
may differ materially from those in forward-looking
statements.
Regarding any disclosure in the press release above about the
debt extensions and amendments involving Orca and the issuance of
the new warrants to Orca, the Company has assumed that the
agreements and the terms of the loan bonus warrants will be
accepted by the TSXV. For risks and uncertainties regarding the
Company and its business generally, see the risk disclosure in the
Company's MD&A for Q1 2024 (filed on SEDAR+ on May 28, 2024) (www.SEDARPLUS.ca), as well as the
risks described below.
Regarding the disclosure above in the "About Ucore Rare
Metals Inc." section, the Company has assumed that it will be able
to procure or retain additional partners and/or suppliers, in
addition to Innovation Metals Corp. ("IMC"), as suppliers for
Ucore's expected future Strategic Metals Complexes ("SMCs"). Ucore
has also assumed that sufficient external funding will be found to
complete the Demo Plant commissioning and demonstration schedule
and also later prepare a new National Instrument 43-101 ("NI
43-101") technical report that demonstrates that the Bokan Mountain
Rare Earth Element project ("Bokan") is feasible and economically
viable for the production of both REE and co-product metals and the
then prevailing market prices based upon assumed customer offtake
agreements. Ucore has also assumed that sufficient external funding
will be secured to continue the development of the specific
engineering plans for the SMCs and their construction. Factors that
could cause actual results to differ materially from those in
forward-looking statements include, without limitation: IMC failing
to protect its intellectual property rights in RapidSX™; RapidSX™
failing to demonstrate commercial viability in large
commercial-scale applications; Ucore not being able to procure
additional key partners or suppliers for the SMCs; Ucore not being
able to raise sufficient funds to fund the specific design and
construction of the SMCs and/or the continued development of
RapidSX™; adverse capital-market conditions; unexpected
due-diligence findings; the emergence of alternative superior
metallurgy and metal-separation technologies; the inability of
Ucore and/or IMC to retain its key staff members; a change in the
legislation in Louisiana or
Alaska and/or in the support
expressed by the Alaska Industrial Development and Export Authority
("AIDEA") regarding the development of Bokan; the availability and
procurement of any required interim and/or long-term financing that
may be required; and general economic, market or business
conditions.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined by the TSXV) accept responsibility for the
adequacy or accuracy of this release.
CONTACTS
Mr. Peter Manuel, Ucore Vice
President and Chief Financial Officer, is responsible for the
content of this news release and may be contacted at
1.902.482.5214.
SOURCE Ucore Rare Metals Inc.
