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VANCOUVER, BC, April 5,
2023 /CNW/ - Total Helium Ltd. (TSXV:
TOH), (OTCQB: TTLHF) ("Total Helium" or the
"Company") announces that it has reached an agreement to
amend (the "Amendment") the definitive purchase and sale
agreement (the "Purchase Agreement") for a joint venture in
the Pinta South Helium Project in Arizona. The Purchase
Agreement, dated effective January 17,
2023, was previously entered into between Brooks Range
Corporation, a wholly-owned subsidiary of the Company, Pinta South
Operating Company, LLC, Butler Minerals I, LLC and Mid America
Exploration LLC (collectively, the "Vendors") and provides
for the acquisition (the "Transaction") of an interest in
existing helium production as well as a working interest in a
large-scale helium exploration and production program in the
Holbrook Basin (the "Pinta
South Project").
Pursuant to the terms of the Transaction, the Company will
acquire a 20% interest in 2 producing wells and a 50% interest in
eight additional existing wells which are being connected to a
helium processing plant for a total purchase price of US$12,000,000 (the "Purchase
Price"). Under the terms of the Amendment, the Purchase
Price will now be satisfied upon completion of the Transaction
through a one-time cash payment of US$9,000,000 and the issuance of 8,108,110 common
shares of the Company (the "Consideration Shares") at a
deemed price of $0.50 per
Consideration Share. The Consideration Shares will be subject
to restrictions on resale for a period of four-months-and-one-day
following issuance in accordance with applicable Canadian
securities laws.
Completion of the Transaction remains subject to a number of
conditions, including receipt of any required regulatory approvals,
receipt of financing, the Company funding a capital development
program for the Pinta South Project in the amount of US$2,000,000 and the delivery of customary
closing documentation. The Transaction cannot be completed
until these conditions have been satisfied, and there can be no
assurance that the Transaction will be completed in a timely
fashion, or at all.
The Company is at arms-length from the Vendors, and no finders'
fee is payable in connection with completion of the
Transaction. The Company has agreed to issue 324,324 common
shares at a deemed price of $0.50 per
share as a fee to third-party who is providing administration
services in connection with the Transaction. The Transaction
constitutes a "fundamental acquisition" for the Company, under the
policies of the TSX Venture Exchange (the "TSXV"), on the
basis that the Company intends to devote the majority of its
capital to the Transaction and the Pinta South Project. As a
result, trading in the Company's common shares has been halted and
it is anticipated that trading will remain halted until the
Transaction has been completed.
For further information concerning the Transaction, readers are
encouraged to review the news release issued by the Company on
March 20, 2022.
Brokered Private
Placement
As result of the Amendment, the Company also announces that it
has agreed to amend the terms of its brokered private placement
(the "Offering") being led by Haywood Securities Inc. (the
"Agent"). The Company will now offer up to 25,000,000
special warrants (each, a "Special Warrant") at a price of
$0.50 per Special Warrant for gross
proceeds of up to $12,500,000.
The net proceeds from the Offering, along with the existing
working capital of the Company, will be utilized by the Company for
satisfaction of the Purchase Price, to satisfy funding for the
capital development program required pursuant to the Purchase
Agreement and to address costs associated with completion of the
Transaction. Completion of the Offering remains subject to
certain conditions, including approval of the TSXV, the
satisfaction of all outstanding conditions to completion of the
Transaction and the satisfaction of customary closing
deliverables.
Each Special Warrant will be exercisable into one (1) unit of
the Company (a "Unit"), for no additional consideration, at
any time after the closing, and each Special Warrant not previously
exercised shall be deemed exercised on the later of (i) the third
business day after a receipt is issued for a final prospectus
qualifying the Units for distribution in all of the Canadian
provinces, except Quebec (the
"Qualifying Jurisdictions") and (ii) the date that is four
months and one day following the closing. Each Unit consists
of one (1) common share of the Company (a "Common Share")
and one (1) Common Share purchase warrant (a "Warrant").
Each Warrant shall entitle the holder thereof to purchase one
Common Share (a "Warrant Share") at an exercise price of
$0.75 at any time up to 24 months
following the closing. The Company shall seek the necessary
approvals to list the Common Shares, Corporate Finance Shares (as
defined herein) and Warrant Shares on the TSXV, which listing shall
be conditionally approved prior to closing. The Company will also
undertake to list the Warrants, and any Warrant comprising,
underlying or issuable (as the case may be) pursuant to each of the
Compensation Special Warrants and the Compensation Options on the
TSXV.
The Company has granted the Agent an option to increase the size
of the Offering by up to 15%, for additional gross proceeds of up
to $1,875,000, at any time up to the
48 hours prior to closing.
The Offering will take place by way of a private placement
pursuant to applicable exemptions from the prospectus requirements
in the Qualifying Jurisdictions, and in those jurisdictions where
the Offering can lawfully be made including the United States under private placement
exemptions.
The Company will use commercially reasonable efforts to prepare
and file a preliminary short form prospectus in the Qualifying
Jurisdictions where the Special Warrants are sold, qualifying the
distribution of the Units, within forty-five (45) days after
closing. The Company has agreed to promptly resolve all comments
received or deficiencies raised by the securities regulatory
authorities and use its commercially reasonable efforts to file and
obtain receipts for the final short form prospectus as soon as
possible after such regulatory comments and deficiencies have been
resolved. In the event a receipt is not received for a final short
form prospectus on or before the date which is
four-months-and-one-day following closing of the Offering, each
Special Warrant shall be automatically exercised and will entitle
the holder to receive 1.1 Units.
In consideration for their services, the Agent will receive a
cash commission equal to 6% of the gross proceeds of the Offering,
such number of compensation special warrants ("Compensation
Special Warrants") equal to 6% of the number of Special
Warrants sold in the Offering and a corporate finance fee equal to
2% of the gross proceeds of the Offering payable in the form of
Common Shares (the "Corporate Finance Shares"). Each
Compensation Special Warrant will be exercisable into one (1)
compensation option (a "Compensation Option"), for no
additional consideration, at any time after the closing, and each
Compensation Special Warrant not previously exercised shall be
deemed exercised on the later of (i) the third business day after a
receipt is issued for a final prospectus qualifying the Units for
distribution in the Qualifying Jurisdictions and (ii) the date that
is four months and one day following the closing. Each Compensation
Option shall entitle the holder thereof to purchase one Unit at an
exercise price of $0.50 at any time
up to 24 months following the closing.
On behalf of the Board,
Robert B. Price, Director and
CEO
Total Helium Ltd. - www.totalhelium.com
The TSX Venture Exchange has in no way passed upon the merits
of the proposed Transaction and has neither approved nor
disapproved the contents of this press release. Neither the
TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
Statements included in this announcement, including
statements concerning our plans, intentions and expectations, which
are not historical in nature are intended to be, and are hereby
identified as, "forward-looking statements". Forward-looking
statements may be identified by words including "anticipates",
"believes", "intends", "estimates", "expects" and similar
expressions. The Company cautions readers that forward-looking
statements, including without limitation those relating to the
Company's future operations and business prospects, are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those indicated in the forward-looking
statements.
SOURCE Total Helium Ltd