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Bullboard - Stock Discussion Forum ENERGIZER RESOURCES INC T.EGZ

"Energizer Resources Inc is an exploration stage company. It is engaged in the advancement of the Molo Graphite Project, consisting of a commercially minable graphite deposit situated in the African country of Madagascar."

TSX:EGZ - Post Discussion

ENERGIZER RESOURCES INC > HERES THE DEAL
View:
Post by frewil1 on Feb 28, 2014 4:28pm

HERES THE DEAL

 
-- Within 15 days of the later of HBE completing a financing and obtaining required exchange approvals, HBE shall make a cash payment of $1,500,000 and issue of 6,750,000 common shares, which represents 9.5% of HBE's current issued and outstanding common shares, -- Make a further cash payment of $1,500,000, due within 18 months of the effective date of the agreement, -- Issue additional common shares to increase Energizer's aggregate equity interest in HBE to 15% of the issued and outstanding shares of HBE within 15 days of the requisite shareholder approval, with a proposal to issue up to an aggregate of a 19.5% equity interest being tabled at the next HBE annual general meeting of shareholders, expected to be held in June 2014. HBE would be required to maintain Energizer's aggregate 15% equity position for a period of 3 years from the effective date of the agreement, -- If shareholder approval is not obtained, then HBE will pay Energizer an additional sum of $500,000 within 18 months of the effective date of the agreement in lieu of shares, and HBE will be required to maintain Energizer's 9.5% equity position for a period of 3 years from the effective date of the agreement, and -- HBE is provided with a future option to purchase the remaining 25% interest of the Sagar Property from Energizer. If exercised, HBE will pay Energizer the sum of $1,000,000 and issue additional shares of its common stock to increase Energizer's aggregate interest to 19.5% of HBE issued and outstanding common stock within 15 days of requisite shareholder and regulatory approval. Energizer has been granted a first right of refusal to maintain its equity position by participating in any future private placements and will also retain a 2% net smelter royalty on the property, of which 1% of the NSR could be bought back by HBE for $1,000,000. If the option is not exercised, than the Parties agree to enter into a joint venture agreement consistent with industry norms for such arrangements including a standard dilution clause. Energizer would then also be entitled to a free carried interest on its 25% participating interest until the delivery by HBE of a Bankable Feasibility Study or equivalent.
Comment by Eindhoven on Feb 28, 2014 5:24pm
Also, EGZ gets a 15% interest in the purchasing company, which cannot be diluted for 3 years! Craig Scherba summed up exactly how I feel about this. Craig Scherba, President and COO of Energizer stated, "We are 100% committed and focused on developing a graphite mine at our flagship Molo deposit in Madagascar. The sale of a portion of the Sagar Project will inject additional capital into ...more