Why else but production or preparing to sell BMG?
Battle Mountain investor to exercise 5.24 million warrants
2016-06-16 10:37 ET - News Release
Shares issued 52,679,171
BMG Close 2016-06-15 C$ 0.59
Mr. Chet Idziszek reports
REDUCTION IN ROYALTY BURDEN ON LEWIS GOLD PROJECT EXERCISE OF WARRANTS BY GOLD STANDARD VENTURES CORP. APPOINTMENT TO BOARD OF DIRECTORS
Further to the news release of May 6, 2016, Gold Standard Ventures Corp. has informed Battle Mountain Gold Inc. that GSV intends to increase its strategic investment in the company by exercising all of GSV's 5,240,717 warrants to acquire an additional 5,240,717 common shares of Battle Mountain at a price of 37 cents per share for an aggregate purchase price of $1,939,065. The consent of the TSX Venture Exchange to the creation of GSV as a new control person of Battle Mountain, a precondition to the exercise of the warrants, has now been received following Battle Mountain's disinterested shareholder approval of GSV as a control person. GSV has advised that it expects to exercise the warrants within the next five to seven days.
*** The gross proceeds from the exercise of the warrants will be used by Battle Mountain to partially finance a buy-down of the existing royalty for gold and silver on Battle Mountain's Lewis gold project in Lander county, Nevada, from 5 per cent to 3.5 per cent, and the conversion of the royalty from a gross royalty to a net smelter returns royalty. GSV has also agreed to advance an additional $416,170 to Battle Mountain to finance the balance of the royalty buy-down. GSV has advised that the warrant purchase price and the additional advance totalling $1.85-million (U.S.) ($2,355,235) will be financed by GSV through a combination of $925,000 (U.S.) in cash and 532,864 common shares of GSV at a deemed price of $1.7359 (U.S.) ($2.21) per share, to be paid by GSV directly to the arm's-length holder of the royalty. Subject to acceptance of the TSX-V, Battle Mountain has agreed to settle the additional advance from Gold Standard through the issuance of a further 885,468 common shares of Battle Mountain at a fair value of 47 cents per share.***
Battle Mountain is advised by GSV that it currently owns 10,481,435 common shares of Battle Mountain, and upon exercise of the warrants, GSV will own a total of 15,722,152 common shares, or approximately 27.14 per cent, of Battle Mountain's issued and outstanding common shares on a postconversion beneficial ownership basis. Upon issuance of the additional advance shares, GSV will own 16,607,620 common shares, or approximately 28.25 per cent, of Battle Mountain's then issued and outstanding common shares.
GSV has advised that the warrant shares and additional advance shares are or will be acquired by GSV as principal for investment purposes, and that GSV has no present intention to acquire further securities of Battle Mountain, although GSV may in the future and in accordance with applicable securities laws, increase or decrease its investment in Battle Mountain by acquiring or disposing of other securities of Battle Mountain, through the market, privately or otherwise, depending on market conditions or any other relevant factors.
GSV has agreed to vote its shares of Battle Mountain in accordance with the recommendations of Battle Mountain's board of directors until Nov. 6, 2017, and give Battle Mountain prior notice of any sales of shares exceeding 2 per cent of Battle Mountain's then issued and outstanding shares in any 15-day period for so long as GSV owns not less than 9.9 per cent of Battle Mountain's issued and outstanding shares.
Following exercise of the warrants, a report respecting the acquisition of the warrant shares, and if applicable, additional advance shares, will be electronically filed by GSV with the applicable securities commission in each jurisdiction where Battle Mountain is reporting, and will be available for viewing through the Internet on SEDAR.
Appointment to board of directors
Jonathan Awde, president and chief executive officer of Gold Standard Ventures, has agreed to join and has been appointed to the board of directors of Battle Mountain.
Mr. Awde has spent the last 12 years financing junior resource companies and has focused on institutional accounts. He has raised over $200-million for public and private companies in the resource sector. As a co-founder, president/CEO and a director of Gold Standard Ventures, he oversees all financing, strategy, corporate activities and developments for that company. Mr. Awde received his BA in economics and finance from Acadia University, and is a former sales and trading professional at a Canadian broker dealer.
Additional royalty reduction option
Battle Mountain and GSV have the collective right to further reduce the royalty from 3.5 per cent to 2.5 per cent by paying the royalty holder the amount of $2.15-million (U.S.), payable one-half in cash and one-half in GSV shares, for a two-year period, which may be extended for a further one year upon payment of an additional $250,000 (U.S.).
Chet Idziszek, president and CEO of Battle Mountain, stated: *** "The reduction in the royalty burden on the Lewis gold project represents a significant enhancement of future potential project economics,. and we believe has the effect of augmenting the attractiveness of the Lewis gold project in the marketplace We welcome Jonathan to the board of Battle Mountain, where his corporate finance background and experience will be an excellent fit."***
Not saying to buy or sell?
GLTA.Ron