VANCOUVER, Aug. 10, 2015 /CNW/ - Northern Dynasty
Minerals Ltd. (TSX: NDM; NYSE MKT: NAK) ("Northern Dynasty" or the
"Company") announces that it intends to raise up to $20 million through a combination of an issuance
of $10-$15 million of Special
Warrants exercisable into the Company's listed common shares at a
price of $0.399 per Special Warrant
together with acquisition of 100% of Cannon Point Resources
("Cannon Point"), an inactive TSX Venture Exchange listed company
(TSXV: CNP) whose primary asset is $4.7
million cash. (All currency values are in Canadian
dollars).
The Special Warrants will be privately placed with accredited
investors, management and insiders of the Company. The Special
Warrants will convert on voluntary or automatic exercise into
common shares of Northern Dynasty on a one-for-one basis. The
Company will file a prospectus in applicable Canadian provinces to
qualify the exercise of the Special Warrants in Canada and will concurrently file a
registration statement in the United
States to qualify the resale of common shares in
the United States by certain U.S.
investors. The Company will use commercial efforts to clear both
the Prospectus and Registration Statement (the "Resale Filings")
within 90 days from the Closing Date and has agreed to maintain the
Registration Statement effective for a period of up to 24
months. There are no share bump-up or other penalties if
clearance of the Resale Filings is delayed. Additional details of
the Special Warrant terms will be contained in the Resale Filings
along with general prospectus disclosure about Northern
Dynasty.
Based on a letter agreement dated today, the Company expects to
acquire 100% of Cannon Point for approximately 12.9 million
Northern Dynasty common shares, subject to the approval of a
special 2/3 majority vote of Cannon Point shareholders as well as
customary regulatory and judicial approvals. The acquisition is not
subject to Northern Dynasty shareholder approval. During the merger
process, which will be by conventional statutory plan of
arrangement, Cannon Point has agreed to make a secured credit
facility for $4.25 million available
to Northern Dynasty. The amounts borrowed would be repayable after
30 days if due to a Northern Dynasty breach and 180 days from
termination if the merger does not complete for any other reason.
Holders of approximately 21% of Cannon Point Shares have agreed to
support the merger transaction, including shareholders associated
with Fiore Management & Advisory Corp. The acquisition of
Cannon Point is subject to negotiation of a definitive agreement,
which will be filed on SEDAR.com when executed which is anticipated
to occur within the next 30 days. The private placement of Special
Warrants is not conditional on the Cannon Point acquisition, but
the Cannon Point acquisition is conditional on at least
$10 million of Special Warrants being
sold.
Completion of both financing transactions is subject at this
time to execution of definitive agreements within 15 business days,
TSX and NYSE MKT approvals and other customary closing conditions.
The Special Warrants offering is expected to close by mid-August 2015 and the Cannon Point acquisition
within 120 days. Pricing of the Special Warrants was based on the
five-day volume weighted trading price of Northern Dynasty shares
on TSX for the period ended July 29,
2015. Negotiation of the Cannon Point acquisition terms
included recognition of the value of the credit facility. A
subsequent news release will detail the final figures when the
offering is fully closed. Neither of the transactions are brokered,
although some customary referral and advisor fees are payable. The
proceeds of the financings will be used for working capital and to
advance the Pebble Project by implementing Northern Dynasty's legal
and environmental strategies.
The securities to be issued pursuant to both transactions have not
been registered under the U.S. Securities Act of 1933, as amended
(the "U.S. Securities Act"), and may not be offered or sold in
the United States absent
registration or applicable exemption from the registration
requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any
sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
About Northern Dynasty Minerals Ltd.
Northern Dynasty is a mineral exploration and development
company based in Vancouver,
Canada. Northern Dynasty's principal asset is the Pebble
Project in southwest Alaska, USA,
an initiative to develop one of the world's most important mineral
resources.
Ronald W. Thiessen
President & CEO
Forward Looking Information and other
Cautionary Factors
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, such as those that address the
in-progress financings and plan to complete certain regulatory
filings are forward-looking statements. These statements include
expectations about the likelihood of completing a financing and
merger transaction and the ability of the Company to secure
regulatory acceptance for its prospectus and registration
statements. Though the Company believes the expectations expressed
in its forward-looking statements are based on reasonable
assumptions, such statements are subject to future events and third
party discretion such as regulatory personnel. For more information
on the Company, and the risks and uncertainties connected with its
business, Investors should review the Company's home jurisdiction
filings at www.sedar.com and its annual filings with the
United States Securities and Exchange Commission.
SOURCE Northern Dynasty Minerals Ltd.