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Imperial Completes $115 Million Non-Brokered Private Placement of Convertible Debentures

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Imperial Completes $115 Million Non-Brokered Private Placement of Convertible Debentures

 

 

 

 

 

Imperial Metals Corporation (TSX:III) announces the closing of a non-brokered private placement of $115.0 million Face Value of 6% 6-year senior unsecured convertible debentures which is a $15.0 million increase from the $100.0 million Convertible Debenture Face Value offering previously announced on August 14, 2014. The Convertible Debentures provide additional financing to complete and commission the Red Chris mine, fund costs of remediating the effects of the tailings dam breach at the Mount Polley mine, and to fund ongoing operations.
 

As announced, Edco Capital Corporation and The Fairholme Partnership, LP have each purchased $40.0 million, or 34.8%, of the Convertible Debentures. Subject to adjustment, each $12.00 of Face Value is convertible into one common share of Imperial upon at least 61 days advance notice. The Convertible Debentures are not callable unless the closing price of Imperial’s common shares exceeds 125% of the conversion price for at least 30 consecutive days. Interest will be payable semi-annually, with the first payment due on June 30, 2015. At the option of the Company, subject to the separate approval of the TSX and compliance with all applicable securities laws, such interest may be paid through the issuance of additional Convertible Debentures or Imperial’s common shares.
 

Edco is owned by N. Murray Edwards, a significant shareholder of the Company. Fairholme and parties related to it are also significant shareholders of the Company. The issue of Convertible Debentures to Edco and Fairholme constitute “related party transactions” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in a Special Transaction (“MI 61-101”). The Convertible Debentures purchased by Edco and Fairholme are exempt from the formal valuation and minority approval requirements of MI 61-101 pursuant to section 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, as they represent less than 25% of the Company’s market capitalization.
 

Mr. Edwards announces that, through Edco, he can now acquire up to an additional 3,333,333 common shares of Imperial in the event of conversion pursuant to the terms and conditions of its $40.0 million Convertible Debenture. Assuming the conversion of the entire $40.0 million Convertible Debenture, as well as the exercise of all warrants currently held by Mr. Edwards and his affiliates, Mr. Edwards would then beneficially own 31,101,815 common shares, representing approximately 39.3% of the then issued common shares of the Company. Mr. Edwards indicated that Edco’s acquisition of the Convertible Debenture was for investment purposes and that he may acquire additional common shares, debentures, warrants or other securities of Imperial from time to time, depending on market conditions. A copy of Mr. Edwards’ early warning report may be obtained from the persons set forth below.
 

The material change report in relation to this transaction will be filed less than 21 days before closing as the Company completed this transaction on September 3, 2014 since all necessary approvals had been received and the Company wished to complete the transaction as soon as was commercially feasible after such approvals were received.
 

This announcement does not constitute an offer of securities for sale in the United States of America. These securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Company and that will contain detailed information about the Company and management, as well as financial statements.
 

About Imperial
 

Imperial is an exploration, mine development and operating company based in Vancouver, British Columbia. The Company operates the Mount Polley copper/gold mine in British Columbia and the Sterling gold mine in Nevada. Imperial has 50% interest in the Huckleberry copper mine and has 50% interest in the Ruddock Creek lead/zinc property, both in British Columbia. Imperial is in development of its wholly owned Red Chris copper/gold property in British Columbia.

Posted September 4, 2014

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