NEWS....... deal Glencore in!https://www.globenewswire.com/news-release/2019/05/16/1826149/0/en/Macarthur-Minerals-Announces-Glencore-Participation-in-Financing.html VANCOUVER, British Columbia, May 16, 2019 (GLOBE NEWSWIRE) -- Macarthur Minerals Limited (TSX-V: MMS) (OTCQB: MMSDF) (the “Company” or “Macarthur”) is pleased to announce, that further to the announcement of March 19, 2019, that a subsidiary of Glencore plc (“Glencore”) has agreed to participate in the US$6 million secured Convertible Note (“Note”) on a private placement basis for US$2 million.
Glencore’s participation in this financing, strengthens the life-of-mine long-term strategic relationship between the parties in line with the previously announced binding Off-Take Agreement (“Agreement”) with Glencore for sale of iron ore to be produced from the Lake Giles Iron Project (“Project”) in the Yilgarn Region of Western Australia.
The proceeds from the Note will be targeted towards the completion of a 2019 compliant Bankable Feasibility Study (“BFS”) on Macarthur’s Moonshine Magnetite iron ore deposits in Western Australia.
Cameron McCall, Executive Chairman of Macarthur Minerals commented;
“Macarthur is delighted to have Glencore’s participation in the private placement. We believe the agreed terms are attractive to both parties and provide Macarthur with funding certainty with minimum dilution to Macarthur’s shareholders. Glencore’s US$2 million investment in the Company’s Note is in addition to the Company’s previous announcement of May 14, 2019 of Exception Capital’s participation in the Note.”
Key terms to the Convertible Notes:
- Each Note has a face value of US$10,000 following adoption of a loan note instrument.
- The Notes (including accrued but unpaid interest) can be converted at any time after 12 months into common shares of Macarthur at the Noteholder’s option at a conversion price that reflects the greater of 80% of the average VWAP over 5 trading days immediately preceding the date of a notice of conversion and C$0.10 (in each case with appropriate equivalence to USD), with attaching warrants offered for one fourth of the commitment amount exercisable at the greater of C$0.10 or the average VWAP over 5 trading days immediately preceding the date of the Advance Date (such term being defined in the definitive documentation) (in each case with appropriate equivalence to USD).
- The Notes will have a term to maturity of 3 years and bear interest at a rate of 12.5% per annum.
- The Notes include a restriction on conversion that provides that such conversion may not have the effect of causing Noteholder to own 20% or more of the common shares of Macarthur or becoming a control person.
- The iron ore mining licences held by Macarthur (or a subsidiary of Macarthur) in respect of the Lake Giles Iron project region of Western Australia will act as security for the Notes issued to the Noteholder.
Any shares issued upon conversion of the principal amount of the Note and any accrued interest will be subject to certain resale restrictions, including a restricted (or “hold”) period of four months and one day following the distribution date of the Note and warrant, under applicable Canadian securities legislation.
The consummation of the US$2 million financing commitment from Glencore is subject to receipt of all necessary regulatory, governmental and legislative approvals including that of the TSX Venture Exchange, the Australian Foreign Investment Review Board and satisfaction of the other conditions set out in the Investment Agreement entered into by the Glencore and Macarthur.