Atlantic Gold Corporation (TSX-V:AGB) is pleased to announce a non-brokered financing of $13 million by way of issuance of convertible debentures subscribed by the following parties all of whom, directly or through affiliates, are existing shareholders of the Company:
|Beedie Investments Ltd. (“Beedie“)||
|Affiliates of the Sprott Group of Companies (“Sprott“)||
|Affiliates of Au Mining Limited (“Au Mining“)||
The Financing, together with the credit approved commitment letter for a $115 million Project Loan Facility entered into between Atlantic, Macquarie Bank Ltd. and Caterpillar Financial Services Corporation, completes funding requirements for the initial capital costs for its Moose River Consolidated Project of approximately $127 million contained in the August 2015 feasibility study, excluding environmental bonding.
Terms of the Debenture
The Debentures carry an interest rate of 8.5%, with the principal payment due 60 months after the date the Financing is completed. The principal amount of the Debentures will be convertible into common shares of the Company at a conversion price of $0.60 per share, representing a 20% premium to the closing trading price of the common shares of Atlantic, prior to this announcement. Accrued interest will also be convertible into common shares of the Company but at the market price of the shares at the time of conversion. The Debentures will be convertible at any time, at the Subscriber’s option (with the exception of Beedie, see below), and will be secured by way of a charge against all existing assets of the Company, subordinated to the lenders of the PLF. Shares acquired on conversion will be subject to a four month plus one day hold period from the Closing Date.
Additional Debenture Terms Specific to Beedie
As a condition of the conversion feature of the Debenture subscribed by Beedie, and as required by the policies of the TSX Venture Exchange, management will seek disinterested shareholder approval (at a shareholders meeting to be scheduled and announced in due course) of a resolution in respect of providing approval for Beedie to exercise his conversion rights under this Debenture and thereby becoming a control person of the Company, as defined under applicable law and the policies of the TSX Venture Exchange. In the event shareholders do not approve this resolution, the Debenture shall become a short term secured loan, subordinated to the lenders of the PLF with a reduced term of 24 months and the interest rate shall increase to 13% per annum, accruing from the Closing Date.
Au Mining and Sprott have committed to vote their currently held shares in favour of the above resolution. The board of directors of Atlantic will recommend to shareholders that they vote their shares in favour of this resolution. The board and management will also vote in favour of this resolution in respect of their own shareholdings.
Furthermore, on the Closing Date, Mr. Ryan Beedie, owner of Beedie Investments Ltd. will have the right to join the board of directors of the Company and will also be nominated by management for re-election to the board at the next Annual General Meeting.
Steven Dean, Chairman and CEO commented, “Atlantic is pleased to have agreed on terms for a convertible debenture with Beedie Investments Ltd. Au Mining Limited and Sprott, all of which have been strong supportive shareholders of the Company.
As discussed above, this transaction completes funding for the initial construction capital expenditures for the MRC Project, reaching another significant milestone in the development of the MRC Project. The Company is looking forward to the finalization of the Financing in the coming weeks”.
About Beedie Investments Ltd.
Beedie Investments Ltd. is the non-real estate investment arm of Beedie Development Group, the largest private industrial land owner, developer and landlord in British Columbia. Beedie Investments Ltd. seeks to deploy Private Equity and Private Debt by collaborating with ambitious operators of high-growth public and private companies.
About the Sprott Group of Companies
The Sprott Group of Companies is a leading alternative asset manager with a proud history of delivering outstanding long-term performance to their clients through a diverse range of innovative products and investment strategies.
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