news Nicola Mining to issue 5.6 million shares for debt
2020-11-13 20:43 ET - News Release
Mr. Peter Espig reports
NICOLA MINING ANNOUNCES DEBT SETTLEMENT
Nicola Mining Inc. intends to pay all of the interest owing on the secured convertible debentures issued on Nov. 21, 2019, by the issuance of common shares of the company. The debentures mature on Nov. 21, 2022, and bear interest at a rate of 10 per cent per annum, which interest is payable under the terms of the debentures annually, at the option of the company, in cash or by the issuance of shares.
The company intends on paying all of the interest in shares to holders of the debentures to settle the outstanding interest payment obligation for the first year of the term of the debentures.
Accordingly, the company intends to issue 5,600,705 shares at a price of 12.5 cents per share in settlement of interest owing of $700,088.20.
Insiders of the company will be issued an aggregate of 5,036,000 shares pursuant to the debt settlement, which will constitute a related party transaction within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The intended issuance to the insiders is exempt from the valuation requirement of MI 61-101 by virtue of the exemption contained in Section 5.5(b) as the company's shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in Section 5.7(a) of MI 61-101 in that the fair market value of the consideration of the shares to be issued to the related party will not exceed 25 per cent of the company's market capitalization. The company will close on the payment of the interest in shares in less than 21 days as the payment of interest is due pursuant to the terms of the debentures.
The debt settlement is subject to TSX Venture Exchange approval. The shares will be subject to a statutory hold period expiring on the date that is four months and one day after the closing of the debt settlement.
We seek Safe Harbor.