TORONTO, Oct. 30, 2018 (GLOBE NEWSWIRE) -- Crystal Peak Minerals Inc.(“Crystal Peak” or the “Company”) (TSXV: CPM, OTCQX: CPMMF) is pleased to announce the closing of the second tranche in the amount of US$5,000,000 pursuant to the convertible loan agreement dated July 19, 2018 (the “Loan Agreement”) with EMR Capital Investment (No. 5B) Pte. Ltd. (“EMR”), an affiliate of EMR Capital Resources Fund 1, LP, the Company’s largest shareholder. The aggregate value of both the first and second tranches is US$10,000,000 (the “Loan”).
As previously announced in the Company’s July 20, 2018 news release, the Loan will mature on January 19, 2020, and will bear interest at the rate of 12%, compounded quarterly. The principal on the amount of the Loan, in whole or in part, is convertible into common shares of the Company at the option of the holder, at a price per common share of C$0.50, subject to adjustment in certain circumstances.
In addition, any interest due pursuant to the Loan is payable in common shares of Crystal Peak at the market price of the Company on the earlier of the date of conversion or certain prescribed interest payment dates, subject to the approval of the TSX Venture Exchange. In connection with the Loan Agreement, Crystal Peak granted a security interest to EMR to secure all of its obligations under the Loan Agreement.
Crystal Peak intends to use the funds received from the second tranche of the Loan for bridge engineering, environmental permitting work and for other general working capital purposes.
All of the securities issued pursuant to the Loan Agreement are subject to a hold period until November 20, 2018.
The Loan by EMR constitutes a “related party transaction” as such term is defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on the exemptions from the formal valuation and minority approval requirements set out in subsection 5.5(a) and (b) and subsection 5.7(1)(a) of MI 61-101 because the Company is not listed on a specified market and the fair market value of the consideration for the securities of the Company issued to EMR pursuant to both tranche 1 and tranche 2 of the Loan does not exceed 25% of its market capitalization. Messrs. Curtis, Carroll, and Lyle, who are directors of the Company, disclosed their interest in the Loan and abstained from voting on the board resolutions approving the Loan as a result of being EMR’s non-independent nominees to the board of directors of the Company. Please refer to the material change report filed by the Company on July 27, 2018 which is available under the Company’s profile at www.sedar.com for further details.