Non-Brokered P.P. /Planned Full Repayment of Credit Facility Vancouver, British Columbia and Johannesburg, South Africa--(Newsfile Corp. - January 25, 2022) - Platinum Group Metals Ltd. (TSX: PTM) (NYSE American: PLG) ("Platinum Group" or the "Company") reports that it intends, subject to regulatory approval, to sell 3,539,823 common shares of the Company at price of US$1.695 each for gross proceeds of US$6.0 million (the "Private Placement") to existing major beneficial shareholder, Hosken Consolidated Investments Limited ("HCI").
The Company intends to use the net proceeds of the Private Placement to repay in full the remaining US$3.0 million principal balance of a senior secured facility with Sprott Private Resource Lending II (Collector), LP and the other lenders party thereto (the "2019 Sprott Facility"), and for general corporate and working capital purposes. Closing of the Private Placement is subject to the prior issuance of the Note Repurchase Shares (as defined below) and customary closing conditions, including stock exchange approvals.
On January 20, 2022, the Company reported the execution of privately negotiated agreements with the beneficial owners of US$20 million of the Company's 6 7/8% Convertible Senior Subordinated Notes (the "Notes") due July 1, 2022 under which the Company will purchase and cancel the Notes for consideration of 11,793,509 Common Shares of the Company (the "Note Repurchase Shares"), plus accrued and unpaid interest which will be paid in cash. Pricing of the Private Placement was set to be consistent with the pricing for the purchase of the Notes. The Private Placement will allow HCI to return to a near 26% interest in the Company, which it holds prior to the purchase and cancellation of the Notes.
The Company's President and CEO, Frank R. Hallam, stated, "We appreciate the support of our major shareholder HCI, allowing the Company to make a final repayment of our debt. The Company will be debt free for the first time since 2015 and will be well positioned to advance its objectives for the Waterberg Project in South Africa."
Securities purchased pursuant to the Private Placement may not be traded for a period of four months plus one day from the closing of the Private Placement. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Act"), as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements of such Act.
HCI is a "related party" of the Company (as defined by Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101")) and the Company intends to rely on the exemptions from both the formal valuation requirement and the minority shareholder approval requirement under sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101, on the basis that neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves HCI, exceeds 25 per cent of the Company's market capitalization calculated in accordance with MI 61-101. The Company will not have filed a material change report more than 21 days before the expected closing date of the above transactions as it has negotiated the above transactions on an expedited basis.
The Company will rely on the exemption for "Eligible Interlisted Issuers" under Section 602.1 of the TSX Company Manual in connection with the listing of the common shares on the Toronto Stock Exchange ("TSX") under the Private Placement.
About Platinum Group Metals Ltd. and Waterberg Project
Platinum Group Metals Ltd. is the operator of the Waterberg Project, a bulk underground palladium and platinum deposit located in South Africa. The Waterberg Project was discovered by Platinum Group and is being jointly developed with Impala Platinum Holdings Ltd., Mnombo Wethu Consultants (Pty) Ltd., Japan Oil, Gas and Metals National Corporation and Hanwa Co. Ltd.
www.platinumgroupmetals.net
https://www.newsfilecorp.com/release/111576