Sandstorm Metals & Energy Announces Restructuring Initiatives at Novadx
https://www.marketwire.com/press-release/sandstorm-metals-energy-announces-restructuring-initiatives-at-novadx-tsx-venture-snd-1704227.htm
Sandstorm Metals & Energy Ltd. ("Sandstorm" or the "Company") (TSX VENTURE:SND) is pleased to announce a proposed restructuring of Novadx Ventures Corp. ("Novadx") which includes new management, an equity offering, a restructuring of the coal stream agreement and a change in the company name.
Novadx has appointed Daniel Roling as President and CEO. Mr. Roling was previously the President and CEO of National Coal Corp., a southern Appalachian coal producer, from August 2006 until it was sold in December 2010. While at National Coal Corp. Mr. Roling restructured the management team and the assets, improving the operating efficiency and financial health of National Coal Corp., while significantly increasing the reserve base and doubling coal production. Prior to serving at National Coal Corp., Mr. Roling was First Vice President and Global Senior Metals and Mining Analyst at Merrill Lynch, where he was employed for 25 years. Mr. Roling is both a Certified Public Accountant and a Chartered Financial Analyst, and is a long-standing member of the National Coal Council.
Novadx has entered into an agency agreement with Casimir Capital Ltd. to launch an offering of special warrants, at a price of CDN$0.05 per special warrant, with the intent to raise gross proceeds of between US$15 million and US$25 million (the "Offering"). Sandstorm has agreed to subscribe for up to US$5 million of the Offering.
In the event that Novadx is successful in securing not less than US$15 million in external financing, Sandstorm has agreed, subject to the approval of Novadx shareholders, to restructure its existing coal stream agreements with Novadx on the following basis:
- US$10 million will convert into Novadx equity, at an effective price of CDN$0.05 per share;
- US$10 million will convert into a secured convertible debenture of Novadx, due 5 years from the closing date of the Offering and bearing interest of 8%, which is not payable until maturity. Sandstorm has the option to convert the debenture into equity of Novadx at CDN$0.10 per share. Novadx can repay the principal and interest outstanding, in whole or in part, subject to Sandstorm's conversion right; and
- US$10 million will convert into a gross overriding royalty (the "Royalty") at the rate of US$4.50 per ton of coal sold from the Rex and Rosa Mines, for the life of the mines, until such time as Sandstorm receives royalty income of US$10 million plus an after-tax IRR of 12%, at which time the Royalty rate shall decrease to US$2.00 per ton of coal.
"The proposed restructuring of Novadx puts Sandstorm in an excellent position to profit from our invested capital", said Sandstorm President and CEO Nolan Watson. "We are confident that through the recapitalization and adjustments to the management team, Novadx has the opportunity to achieve long-term success."
As part of the restructuring initiative, Novadx intends to change its name to Blackpaw Coal Corp.