WHITEHORSE, YT, April 28,
2023 /CNW/ - Minto Metals Corp. (TSXV: MNTO)
("Minto" or the "Company") announces three transactions to
improve organizational liquidity:
- Extension of Sumitomo Offtake Agreement (as defined below) and
a US$1.5 million drawdown under the
Sumitomo Facility (as defined below).
- The Company and Capstone Mining Corp. ("Capstone") have agreed
to amend and extend the share purchase agreement payment of
deferred purchase price obligations.
- The Company also announces it has entered into a new term loan
agreement dated April 14, 2023 (the
"Loan Agreement") with Lion Point Capital, LP ("Lion Point"),
Copper Holdings, LLC ("Copper" and together with Lion Point, the "Lenders") and GLAS Americas
LLC, as agent for the Lenders.
Sumitomo Prepayment Facility and
Offtake Agreement
Minto has drawn down a further US$1.5
million under its existing prepayment facility (the
"Sumitomo Facility") with Sumitomo Canada Limited ("Sumitomo")
pursuant to the amended and restated prepayment facility agreement
dated May 16, 2022 entered into
between the Company and Sumitomo (the "Sumitomo Facilty
Agreement"), bringing the total amount of funds advanced by
Sumtiomo under the Sumitomo Facility to US$12.5 million. Pursuant to the Sumitomo
Facility Agreement, Sumitomo established a secured prepayment
non-revolving credit facility in favour of Minto in the amount of
US$17.5 million, repayable over 48
months, and is in connection with an offtake agreement dated
May 16, 2022 entered into between the
parties (the "Offtake Agreement").
Under the Offtake Agreement, Sumitomo agreed to purchase 100% of
the copper concentrate produced at the Minto Mine for a four year
term, based on 50,000 dry metric tonnes ("dmt")/year of concentrate
production. In conjunction with the US$1.5
million drawdown under the Sumitomo Facility, Sumitomo and
Minto amended the Offtake Agreement to extend the term by a further
12 months or until an additional 40,000 dmt of copper concentrate
are produced. The Company intends to use the proceeds of the
drawdown for general corporate purposes.
Amendment to Share Purchase Agreement
The Company, Pembridge Resources plc ("Pembridge") and Capstone
have agreed to amend the share purchase agreement dated
June 3, 2019, as amended by amending
agreement no. 1 dated December 23,
2021, amending agreement no. 2 dated January 14, 2022 and amending agreement no. 3
dated February 9, 2023 (collectively
the "SPA") to revise the schedule for payment of the balance of the
deferred purchase price in the amount of US$5 million owing to Capstone under the SPA to
be payable as follows: (a) $250,000
on each of September 1, 2023,
December 1, 2023, March 1, 2024 and June 3,
2024 and (b) $1,000,000 on
each of September 3, 2024,
December 3, 2024, March 3, 2025 and June 3,
2025. In addition, the terms of the amendment provide that
Pembridge has assigned to Minto and Minto has agreed to assume all
of Pembridge's obligations under the SPA, and Capstone has released
Pembridge from all such obligations.
The entry into of the SPA constitutes a "related party
transaction" pursuant to Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"), as Pembridge is a principal
shareholder of the Company, and Gati
Al-Jebouri is a director of Minto and the Chief Executive
Officer and Chairman of Pembridge, and as such is a "related party"
under MI 61-101. The Company is exempt from the requirements to
obtain a formal valuation or minority shareholder approval in
connection with the Amended SPA in reliance of sections 5.5(b) and
5.7(1)(a) of MI 61-101. A material change report in connection with
the SPA was not filed more than 21 days in advance of entering into
the SPA as the Company wished to close the transaction as soon as
practicable following finalization of the terms, which the Company
deems reasonable in the circumstances.
New Term Facility
Pursuant to the Loan Agreement, the Lenders have agreed to
provide a secured non-revolving term facility (the "Facility") in
the principal amount of C$1 million,
which may be increased to C$2
million, subject to further commitments being obtained from
the Lenders to fund any additional amounts under the Loan
Agreement. The Facility bears interest at the rate of 10% per
annuum, payable semi-annually. Repayment of the Facility is due on
the earlier of: (i) April 14, 2026;
and (ii) the final repayment date under the Company's previously
issued secured notes dated June 3,
2019 held by Cedro Holdings I, LLC ("Cedro") and Stiftelsen
Lejonudden.
The entry into of the Loan Agreement also constitutes a "related
party transaction" pursuant to Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"), as Copper and Cedro (which
Lion Point manages) are each
principal shareholders of the Company. In addition, Lazaros Nikeas
and Derek White are each a Director
of Minto, and Mr. Nikeas manages, and Mr. White is an advisor to,
Copper. Jay Johnson is also a
Director of Minto and the Partner and Associate Portfolio Manager
of Lion Point, which manages Cedro. As such, Copper and Cedro are
each a "related party" under MI 61-101. The Company is exempt from
the requirements to obtain a formal valuation or minority
shareholder approval in connection with the Loan Agreement in
reliance of sections 5.5(b) and 5.7(1)(a) of MI 61-101. A material
change report in connection with the Loan Agreement was not filed
more than 21 days in advance of entering into the Loan Agreement as
the Company wished to close the transaction as soon as practicable
following finalization of the terms, which the Company deems
reasonable in the circumstances.
About Minto Metals Corp.
Minto operates the producing Minto mine located within the
traditional territory of the Selkirk First Nation in the Minto
Copper Belt of the Yukon. The
Minto mine has been in operation since 2007 with underground mining
commencing in 2014. Since 2007, approximately 500Mlbs of copper
have been produced from the Minto mine. The current mine operations
are based on underground mining, a process plant to produce
high-grade copper, gold, and silver concentrate, and all supporting
infrastructure associated with a remote location in Yukon. The Minto property is located west of
the Yukon River, about 20 km WNW of Minto
Landing, the latter on the east side of the river, and
approximately 250 road-km north of the City of Whitehorse, the capital city of
Yukon.
Forward-Looking Information
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates, and projections as of the date of this
news release. Any statement that involves discussions with respect
to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as "expects", or "does not expect",
"is expected", "anticipates" or "anticipated" or "does not
anticipate", "plans", "budget", "scheduled", "forecasts",
"estimates", "believes" or "intends" or variations of such words
and phrases or stating that certain actions, events or results
"may" or "could", "would", "might " or "will" be taken to occur or
be achieved) are not statements of historical fact and may be
forward-looking statements. In this news release, forward-looking
statements relate, among other things, to: statements with respect
to the Loan Agreement, including the Lenders lending additional
amounts thereunder, [statements with respect to an amendment to
the Offtake Agreement] [NTD: Please confirm if this is
done.], and future payments owed by the Company to Capstone
under the Amended SPA.
Forward-looking statements are necessarily based upon a number
of estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors, which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking statements. Such factors and risks include, but are
not limited to: failure of the Lenders to loan additional amounts;
failure to make any of the future payments owed to Capstone under
the SPA; general business, economic, competitive, political and
social and international conflict uncertainties; the delay or
failure to receive regulatory approvals; the supply and demand for
labour and other project inputs; changes in commodity prices;
changes in interest and currency exchange rates; risks relating to
inaccurate geological and engineering assumptions; risks relating
to unanticipated operational difficulties (including failure of
equipment or processes to operate in accordance with specifications
or expectations, cost escalation, unavailability of materials and
equipment, government action or delays in the receipt of government
approvals, industrial disturbances or other job action, and
unanticipated events related to health, safety and environmental
matters); risks relating to adverse weather conditions; political
risk, social unrest or international conflict; changes in general
economic conditions or conditions in the financial markets; changes
in laws; risks related to the direct and indirect impact of
COVID-19 including, but not limited to, its impact on general
economic conditions, and the ability to obtain financing as
required; and other risk factors as detailed from time to time,
including those risk factors set out in the Company's MD&A
and annual information form for the year ended December 31, 2022. There can be no assurance that
such statements 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 the forward-looking statements and information
contained in this news release. Except as required by law, the
Company assumes no obligation to update the forward-looking
statements of beliefs, opinions, projections, or other factors,
should they change, except as required by law. The statements in
this news release are made as of the date of this 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.
Contact Information:
Tania Barreto, CPIR
Director, Investor Relations
info@mintometals.com
604 759 4666
SOURCE Minto Metals Corp.