Excelsior Mining Corp. (TSX: MIN) (PFSE: 3XS) (OTCQX: EXMGF) ("Excelsior" or the “Company”) is pleased to announce that it and its wholly-owned subsidiary Excelsior Mining Arizona, Inc. (“Excelsior Arizona”) has agreed with Nebari Natural Resources Credit Fund I LP (“Nebari”) to extend the maturity date of its existing US$15 million credit facility to March 31, 2025. In addition, the Company has entered into agreements for a US$3 million private placement of unsecured convertible debentures (the “Debenture Offering”).
Credit Agreement Extension
The Company, Excelsior Arizona and Nebari have entered into a Second Amendment to the Amended and Restated Credit Agreement (the “Second Amended ARCA”). The Second Amended ARCA provides for the extension of the maturity date of the existing US$15 million credit facility to March 31, 2025 (the “Extension”).
The Extension is subject to certain conditions including completion of the Debenture Offering by February 17, 2023 and conclusion of certain agreements with Triple Flag International.
As consideration for the Second Amended ARCA, subject to Toronto Stock Exchange approval, the Company is required to issue common shares of the Company (“Common Shares”) to nominees of Nebari in a number equal to US$450,000.00, converted to Canadian dollars at an exchange rate equal to the average market rate posted by the Bank of Canada for the 5 days preceding the issuance, divided by the lower of (i) the conversion price of the Debenture Offering and (ii) the volume weighted adjusted price of the Common Shares for the 5 trading days immediately preceding the issuance. In addition, commencing January 31, 2024 the Company will begin amortizing US$5 million of the principal amount of the facility in monthly instalments of US$333,333.33.
Pursuant to the Debenture Offering, investors will subscribe for a total of US$3 million principal amount of convertible debentures (the “Debentures”). The terms of the Debentures include:
- a maturity date of three years from the date of closing (the “Maturity Date”) and the principal amount, together with any accrued and unpaid interest, will be payable on the Maturity Date, unless earlier converted in accordance with their terms;
- the Debentures bear interest (the “Interest”) at the rate of 10% per annum, which Interest will be payable on April 1, 2025 and on the Maturity Date, unless earlier converted into Common Shares;
- the principal amount of the Debenture is convertible into Common Shares at the option of the holder at a conversion price of US$0.19 per Common Share;
- the accrued and unpaid Interest is convertible into Common Shares at a conversion price equal to the volume weighted average trading price on the Toronto Stock Exchange for the five trading days prior to the date of conversion; and
- the Debentures are unsecured.
The Company intends to use the proceeds of the Debenture Offering for project development expenses and working capital. The closing of the Debenture Offering is subject to customary conditions, including the approval of the Toronto Stock Exchange.
Nebari is at arm's length to the Company. There are no commissions or finders' fees payable in connection with the transactions discussed in this news release. There is no assurance that the conditions to the Second Amended ARCA or closing of the Debenture Offering will be satisfied.
Greenstone and its affiliated entities currently hold 116,028,937 Common Shares (representing 42.22% of the Company's current issued and outstanding Common Shares). Greenstone also owns and controls 1,250,000 options to acquire Common Shares. Upon closing of the Debenture Offering and conversion of the Debentures held by Greenstone (assuming conversion of all interest payments on the maturity date, using a conversion price of US$0.19), Greenstone would acquire ownership and control over an additional 10,263,158 Common Shares, representing approximately 3.7% of the Company’s current issued and outstanding Common Shares. As a result, together with the Common Shares it currently owns and controls, Greenstone would hold a total of 126,292,095 Common Shares, which will represent, in aggregate approximately 44.3% of the issued and outstanding Common Shares (assuming conversion of only the Debentures held by Greenstone and assuming the conversion of all interest to maturity at US$0.19).
Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), Greenstone's participation in the Debenture Offering constitutes a "related party transaction" as Greenstone is a related party of the Company. The Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that at the time Greenstone's participation in the Debenture Offering was agreed to, neither the fair market value of the securities to be distributed in the Debenture Offering nor the consideration to be received for those securities, insofar as the Debenture Offering involved the related party, exceeds 25% of the Company's market capitalization. The Company will not file a material change report related to this financing more than 21 days before the expected closing of the Debenture Offering as required by MI 61-101 since the details of the participation by the related parties of the Company were not settled until just prior to closing and the Company wished to close on an expedited basis for sound business reasons. The Common Shares that will be acquired by Greenstone will be acquired pursuant to an exemption from the prospectus requirement in section 2.3 of National Instrument 45-106.
About Excelsior Mining
Excelsior “The Copper Solution Company” is a mineral exploration and production company that owns and operates the Gunnison Copper Project in Cochise County, Arizona. The project is a low cost, environmentally friendly in-situ recovery copper extraction project that is permitted to 125 million pounds per year of copper cathode production. Excelsior also owns the past producing Johnson Camp Mine and a portfolio of exploration projects, including the Peabody Sill and the Strong and Harris deposits.
For more information on Excelsior, please visit our website at www.excelsiormining.com.
For further information regarding this press release, please contact:
Excelsior Mining Corp.
Concord Place, Suite 300, 2999 North 44th Street, Phoenix, AZ, 85018.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward looking information contained in this news release includes, but is not limited to, statements with respect to: (i) the completion of the conditions to the Second Amended ARCA; (ii) the closing of the Debenture Offering; (iii) the use of proceeds of the Debenture Offering; and (iv) future production and production capacity from the Company’s mineral projects.
In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the availability of financing to implement the Company’s operational plans, the estimation of mineral resources and mineral reserves, the realization of resource and reserve estimates, expectations and anticipated impact of the COVID-19 outbreak, copper and other metal prices, the timing and amount of future development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs (including the price of acid), the availability of labour, material and acid supply, receipt of and compliance with necessary regulatory approvals and permits, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the construction and operation of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not be sustained at the Gunnison Copper Project, risks relating to variations in mineral resources and reserves, grade or recovery rates, risks relating to the ability to access infrastructure, risks relating to changes in copper and other commodity prices and the worldwide demand for and supply of copper and related products, risks related to increased competition in the market for copper and related products, risks related to current global financial conditions, risks related to current global financial conditions and the impact of COVID-19 on the Company’s business, uncertainties inherent in the estimation of mineral resources, access and supply risks, risks related to the ability to access acid supply on commercially reasonable terms, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the construction or mining process, regulatory risks including the risk that permits may not be obtained in a timely fashion or at all, financing, capitalization and liquidity risks, risks related to disputes concerning property titles and interests, environmental risks and the additional risks identified in the “Risk Factors” section of the Company’s reports and filings with applicable Canadian securities regulators.Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information