/NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
VANCOUVER,
Aug. 20, 2014 /CNW/ - American CuMo
Mining Corporation ("CuMoCo" or the "Company") (TSXV: MLY;
OTCQX: MLYCF) is pleased to announce revised terms for its
proposed US$25,000,000 financing (the
"Idaho CuMo Financing") involving the sale of up to 100 units
("Idaho CuMo Units") of its subsidiary, Idaho CuMo Mining
Corporation ("Idaho CuMo") at a price of US$250,000 per Idaho CuMo Unit, with each Idaho
CuMo Unit consisting of a non-transferable promissory note in the
principal amount of US$250,000 (a
"Note") and a right (the "Silver Purchase Right") to enter into a
silver purchase and sale agreement (a "Silver Purchase Agreement")
with Idaho CuMo (see News Release dated December 18, 2013). The Notes would now be
secured against the assets of Idaho CuMo (previously the Notes were
to have been unsecured); bear interest at a rate of 8.5% per annum
(previously 6.0%), payable semi-annually on June 30 and December 31; and have a term of 7 years
.With the consent of the holder of the Note, Idaho CuMo could
prepay all or any portion of the principal amount outstanding under
such Note at any time, provided that any prepayment in whole or in
part of the Note would cause the Silver Purchase Right to
immediately expire.
The Silver Purchase Right would be exercisable
by the holder within 30 days of completion of a feasibility study
and decision by the Company to place its CuMo Project located in
Idaho into commercial production
provided that the Note had not been repaid in full or in part by
the Company. Each Silver Purchase Right would, if exercised,
require the purchaser to purchase and Idaho CuMo to sell to the
purchaser refined silver in an amount equal to 0.5% of the silver
(in any form) produced from the CuMo Project, up to a maximum of
375,000 ounces of refined silver (previously 312,500 ounces of
refined silver) (the "Silver Maximum") pursuant to a Silver
Purchase Agreement.
If all Idaho CuMo Units under the Idaho CuMo
Financing are issued and all Silver Purchase Rights were exercised,
Idaho CuMo would be required to sell up to a maximum of 37,500,000
ounces of refined silver, which silver would be deliverable from
50% of the silver produced from the CuMo Project. Upon exercise of
the Silver Purchase Right, the purchaser would pay an upfront cash
payment of US$250,000 (the "Deposit")
per Silver Purchase Right exercised upon execution of the Silver
Purchase Agreement, which payment would be made by way of a set off
against repayment of the principal amount of loans owing by Idaho
CuMo to the purchaser. The Deposit would be unsecured.
The purchase price for each ounce of refined
silver purchased would be comprised of (a) an ongoing cash payment
("Ongoing Payment"), being the lesser of (i) the London silver spot price and (ii) US$5/oz, subject to an inflationary adjustment;
and (b) a deposit reduction amount, being the amount by which the
silver spot price exceeds the Ongoing Payment, paid as a reduction
to the Deposit and payable until such time as the Deposit is
reduced to zero.
The term of the Silver Purchase Agreements would
continue until the earlier of (i) the date on which the
Silver Maximum has been delivered to the
purchaser; and (ii) 40 years (subject to automatic 10-year renewals
if the CuMo Project is in operation). Any uncredited balance of the
Deposit at the end of a Silver Purchase Agreement's term would be
refunded to the purchaser.
The Company hopes to close the Idaho CuMo
Financing on or before October 15,
2014 and it is subject to the approval and consent of the
TSX Venture Exchange and the preparation and approval by the
parties of definitive legal documentation.
Proceeds from the Idaho CuMo Financing will be
used to further develop the Company's flagship asset, the CuMo
Project, a large molybdenum, copper, and silver property located in
Idaho, including: updating the
resource calculation, updating the economic analysis, expanding
metallurgical testing, conducting in-fill drilling and conducting
environmental base-line studies, as well as for general working
capital purposes and repaying the convertible notes issued to
International Energy & Mineral Resources Investment
(Hong Kong) Company Limited.
Finder's fees, in accordance with TSX policy, will be paid in
connection with the Idaho CuMo Financing.
NON-BROKERED PRIVATE PLACEMENT
The Company also announces a concurrent
non-brokered private placement of up to 10,000,000 units
("CuMoCo Units") at a price of Cdn$0.05 per CuMoCo Unit for gross proceeds of up
to $500,000 (the "CuMoCo Offering"),
a portion of which will be applied to reduce the Company's working
capital deficit and the remainder for general corporate
purposes. Each CuMoCo Unit will consist of one common share
of the Company and one share purchase warrant (a "Warrant")
exercisable to purchase one common share of the Company at a price
of Cdn$0.10 per common share for a
period of two years from the date of issue, subject to an
acceleration provision whereby the term of the Warrants may be
accelerated in the event that the Company's common shares trade at
or above a price of Cdn$0.12 per
share for a period of 10 consecutive trading days. In such case,
the Company may give notice to the holders of Warrants that the
Warrants will expire 20 days from the date of providing such
notice.
The CuMoCo Offering shall include two parts: a
private placement to existing shareholders of CuMoCo (the "Existing
Shareholder Private Placement") under a new prospectus exemption
process as set out in British Columbia Instrument 45-534 (and
in similar instruments in other provinces of Canada except for Ontario and Newfoundland and Labrador) and a non-brokered private placement
to all other eligible investors in accordance with applicable TSX
Venture Exchange rules and securities laws (the "Concurrent
Offering").
Existing shareholders of CuMoCo are encouraged
to participate in the proposed Existing Shareholder Private
Placement and are invited to contact CuMoCo by email at
info@cumoco.com or by telephone at +1 (604) 689-7902, for
additional information. Only CuMoCo shareholders who, as of the
close of business on August 20 ,
2014, held common shares of CuMoCo and continue to hold common
shares at the time of closing may participate in the Existing
Shareholder Private Placement. Unless the CuMoCo shareholder is a
person that has obtained advice regarding the suitability of the
investment and, if such shareholder is resident in a jurisdiction
of Canada, that advice has been
obtained from a person that is registered as an investment dealer
in such jurisdiction, the aggregate subscription cost to such
shareholder for the CuMoCo Units subscribed under the Existing
Shareholder Private Placement cannot exceed $15,000 (300,000 CuMoCo Units). Existing
shareholders who are residents of the Provinces of Alberta, British
Columbia, Manitoba,
New Brunswick, Nova Scotia, Prince
Edward Island, Québec, Saskatchewan, Yukon, Northwest
Territories and Nunavut may
participate in the Existing Shareholder Private Placement and
existing shareholders resident in countries other than Canada may need to meet the applicable
eligibility requirements, if any, in their jurisdiction of
residence to participate. Shareholders resident in Ontario and Newfoundland and Labrador are not permitted to participate in
the Existing Shareholder Private Placement.
The maximum offering under the Existing
Shareholder Private Placement shall be the balance of the Offering
not sold through the Concurrent Offering to institutional and
eligible accredited investors and no minimum number of CuMoCo Units
and minimum dollar amount raised has been set. If the aggregate
subscriptions for CuMoCo Units under the Existing Shareholder
Private Placement exceed the maximum number of CuMoCo Units
proposed to be distributed, subscriptions will be accepted on a
first come, first served basis such that it is possible that a
subscription received from a shareholder may not be accepted by the
Company if the CuMoCo Offering is over-subscribed, The Board of
directors will decide on whether or not to increase the size of the
placement to accommodate the over subscription. The terms and
completion of the CuMoCo Offering are subject to TSX Venture
Exchange approval.
The securities offered pursuant to the Idaho
CuMo Financing and the CuMoCo Offering have not been, and will not
be, registered under the United
States Securities Act of 1933, as amended (the
"U.S. Securities Act") or any United
States state securities laws, and may not be offered or sold
in the United States or to, or for
the account or benefit of, U.S. persons absent registration or any
applicable exemption from the registration requirements of the
U.S. Securities Act and applicable U.S. state securities
laws. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy securities in
the United States, nor shall there
be any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful.
UPDATE ON CUMO PROJECT
The Company announces that the Supplemental
Environmental Assessment (the "SEA") being prepared in respect of
the CuMo project is nearing completion, which will enable the
Company to complete its exploration program. The US Forest Service
(the "USFS") has been meticulously responding to public comments
received on the draft version. A key element of the SEA is
assurance by the Idaho Department of Environmental Quality (the
"DEQ") that exploration will not adversely impact water quality.
CuMoCo has agreed to collect and analyze water samples before and
after drilling to help the agency monitor impacts, if any, and DEQ
has withdrawn its previous concerns. The USFS is adding a section
to the SEA that addresses the impacts of recent lightning-caused
wildfires on approximately 20% of the project site. The Company
looks forward to receiving the final report.
Mr. Shaun M.
Dykes, M.Sc. (Eng), P.Geo., President and CEO of the Company
is the designated qualified person for the CuMo Project, and
prepared the technical information contained in this news
release.
About CuMoCo
CuMoCo is focused on advancing its CuMo Project
towards feasibility and establishing itself as one of the largest
and lowest-cost molybdenum producers in the world as well as a
significant producer of copper and silver. Management is continuing
to build a strong foundation from which to move the Company and the
CuMo Project forward. For more information, please visit
www.cumoco.com and www.cumoproject.com
Neither the TSX Venture Exchange nor its
Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this new release.
Forward-looking information
This news release contains "forward-looking
information" within the meaning of applicable Canadian securities
legislation including, but not limited to, statements that address
activities, events or developments that the Company expects or
anticipates will or may occur in the future, such the Company's
ability to move its CuMo Project to feasibility and production, and
to become one of the largest and lowest-cost molybdenum producers
in the world as well as a significant producer of copper and
silver. Forward-looking information is based on a number of
material factors and assumptions, including the result of
exploration activities, the ability of the Company to raise the
financing for a feasibility study and to put the CuMo project into
production, that no labour shortages or delays are experienced,
that plant and equipment function as specified that the Court will
not intervene with the Company's proposed exploration activities at
the CuMo Project, and the ability of the Company to obtain all
requisite permits and licenses to advance the CuMo Project and
eventually bring it into production. Forward-looking information
involves known and unknown risks, future events, conditions,
uncertainties and other factors which may cause the actual results,
performance or achievements to be materially different from any
future prediction, projection or forecast expressed or implied by
the forward-looking information. Such factors include, among
others, the interpretation and actual results of current
exploration activities; changes in project parameters as plans
continue to be refined; future prices of molybdenum, silver and
copper; possible variations in grade or recovery rates; labour
disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing, as well as those
factors disclosed in the Company's publicly filed documents,
including the Company's Management's Discussion and Analysis for
the period ended March 31,
2014. There may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking information. Except as required under applicable
securities legislation, the Company undertakes no obligation to
publicly update or revise forward-looking information.
SOURCE American Cumo Mining Corporation