Bunker Hill Mining Corporation (CSE:BNKR) is pleased to announce that it has closed the private placements previously announced on August 9, 2018, with two key investors, for gross proceeds of CAD$1,379,304.
The Company issued 1,604,076 Units to Gemstone 102 Ltd. at a price of $0.45 per Unit. Each Unit entitles Gemstone to acquire one common share and one common share purchase warrant with each Unit Warrant entitling Gemstone to acquire one common share of the Company at a price of $0.45 for a period of three years. Prior to the issuance of the Units, Gemstone held 4,000,000 common shares of Bunker (12.12%) and 2,000,000 warrants exerciseable at a price of $2.00 per share (16.21% on a partially diluted basis). Immediately prior to closing, the Prior Warrants were early terminated by mutual agreement of the Company and Gemstone. Upon issuance of the 1,604,076 Units to Gemstone, Gemstone beneficially owns or exercises control or direction over 5,604,076 common shares of Bunker representing 16.2% of the issued and outstanding shares. Assuming exercise of the Unit Warrants, Gemstone would hold 7,208,152 of the outstanding common shares of Bunker, representing 19.90% of the issued and outstanding common shares of Bunker.
Gemstone’s participation in the Offering constitutes a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company is relying on the exemption from valuation and minority shareholder approval requirements pursuant to sections 5.5(a) and 5.7(a) of MI 61-101, as the fair market value of the participation in the Offering by insiders does not exceed 25% of the market capitalization of the Company.
Under the terms of the Amended and Restated Loan Agreement with Hummingbird Resources PLC having a principal amount of USD$2,000,000 and bearing interest at 10%, maturing June 13, 2019, Hummingbird may, at any time prior to maturity, convert any or all of the principal amount of the loan and accrued interest thereon, into common shares of Bunker as follows: (i) USD$1,500,000, being the original principal amount, and using a USD/CAD currency conversion rate of .7689, the Principal Amount may be converted at a price per share equal to $0.85, entitling Hummingbird to acquire 2,294,835 common shares upon conversion of the Principal Amount, and 229,411 common shares upon conversion of the unpaid and accrued interest thereon; (ii) 2,294,835 common shares may be acquired upon exercise of warrants at a price of $0.85 per warrant for a period of two years from the date of issuance; (iii) USD$500,000, being the additional principal amount (“Additional Amount”) and using a USD/CAD currency conversion rate of .7507, the Additional Amount may be converted at a price per share equal to $0.45, entitling Hummingbird to acquire 1,477,777 common shares upon conversion of the Additional Amount, and 147,777 common shares upon conversion of the unpaid and accrued interest thereon; and (iv) 1,167,143 common shares may be acquired upon exercise of warrants at a price of $0.45 per warrant for a period of two years from the date issuance.
In the event that Hummingbird would acquire common shares in excess of 9.999% through the conversion of the Principal Amount or Additional Amount, including interest accruing thereon, or on exercise of the warrants as disclosed herein, the Company shall pay to Hummingbird a cash amount equal to the common shares exercised in excess of 9.999%, multiplied by the conversion price. The news release of the Company dated August 9, 2018 further sets out restrictions, terms and conditions that may require the Company to pay cash to Hummingbird in lieu of the issuance of a number of common shares resulting in Hummingbird holding more than 9.999% of the Company’s issued common shares.
Gemstone acquired the securities for investment purposes and may increase or decrease its holdings in Bunker from time to time. This press release is being issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issuers which requires the issuance of this news release and the filing of an early warning report under Bunker’s profile on SEDAR (www.sedar.com) containing additional information respecting the forgoing matters. A copy of that early warning report may be obtained under Bunker’s profile at www.sedar.com.
All of the securities issued, including all underlying securities thereof, are subject to a hold period under applicable securities law of four months a day from the date of issuance. Securities of the Company sold in the Offering constitute “restricted securities” under U.S. securities laws and, accordingly, are also subject to additional resale restrictions. The Offering is subject to final acceptance of the Canadian Stock Exchange (CSE).
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
The proceeds of the two financings shall be used for payments to the property owner, the United States Environmental Protection Agency and for general working capital.
About Bunker Hill Mining Corp.
Bunker Hill Mining Corp. has an option to acquire 100% of the Bunker Hill Mine.
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