Kutcho Copper Corp. (TSX-V: KC) (OTC: KCCFF) is pleased to announce that it has closed its amendment agreement with Wheaton Precious Metals Corp. as announced and described in Kutcho’s news release of February 11, 2022.
As part of the closing of the Amendment, Kutcho issued to Wheaton 10,485,958 common shares at a price of $0.908 per common share (having a total value of US$7,500,000) and settled and terminated the Company’s outstanding debt instruments (the existing convertible debenture and loan agreement as part of the Amendment terms described in the February 11, 2022 news release. Wheaton now owns 17,639,804 Common Shares, representing approximately 15.39% of the Company’s issued and outstanding Common Shares, and 16.12% of the Company’s Common Shares on a partially diluted basis, assuming Wheaton’s exercise of the Warrants. All common shares issued to Wheaton are subject to a hold period of four months and one day from closing. The issuance of the shares received TSX Venture Exchange conditional approval and is subject to the Company’s final filing requirements with TSXV.
Prior to the closing of the Amendment, Wheaton held 7,153,846 common shares in the capital of Kutcho and 1,000,000 Common Share purchase warrants, representing approximately 6.87% of the Company’s issued and outstanding Common Shares (on an undiluted basis), and 25.26% on a partially diluted basis, assuming Wheaton’s exercise of 1,000,000 Warrants and conversion of the Convertible Debenture for the full principal amount, which would result in the issuance of 24,615,384 Common Shares. As a result, Wheaton was considered a “related party” of the Company and the Amendment may be considered to be a “related party transaction” under Multilateral Instrument 61-101. The Amendment and related transactions were exempt from the valuation requirements of MI 61-101 because Kutcho is listed on the TSXV (subsection 5.5(b) of MI 61-101) and the minority shareholder approval requirements because: (i) the Company is in serious financial difficulty; and (ii) the Amendment is designed to improve the financial position of the Company (subsection 5.7(e) of MI 61-101). The directors of Kutcho (all of whom are independent of Wheaton) have unanimously determined that (i) and (ii) apply and the terms of the transaction were reasonable in the circumstances of Kutcho.
The Common Shares and Warrants held by Wheaton are presently being held only for investment purposes. Wheaton may from time to time in the future increase or decrease its ownership, control or direction over Common Shares or any other securities of the Company, through market transactions, private agreements or otherwise. Wheaton intends to file an early warning report pursuant to applicable securities laws in connection with the transactions contemplated hereby. A copy of the Early Warning Report to which this press release relates can be obtained from Wheaton, at 1-844-288-9878 or email@example.com or on the SEDAR profile of the Company at www.sedar.com.
Haywood Securities Inc. is acting as financial advisor to Kutcho.
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