Item 1.01
Entry into a Material Definitive Agreement.
On June 10, 2016, Golden Minerals Company (the
Company
) received a notice of conversion from Sentient Global Resources Fund IV, L.P., a Cayman Islands exempted limited partnership (
Sentient
) in which Sentient elected to convert at a conversion price of approximately $0.29 per share, $1,159,648
of principal and accumulated interest of its $5.0 million Senior Secured Convertible Note (the
Note
) into 4,011,740 shares (the
Shares
) of common stock, $0.01 par value (
Common Stock
) of the Company (the
Conversion
). The Note was issued pursuant to a Loan Agreement dated October 27, 2015 (the
Loan
Date) among the Company and Sentient. The $0.29 conversion price is 90% of the volume weighted average price for the 15 day period immediately preceding the Loan Date. The Company expects to issue the Shares on or about June 17, 2016. Following the Conversion, the Note will be fully converted, no outstanding balance of principal or interest will remain and the Note will be cancelled and returned to the Company.
Sentient is a private equity fund managed by The Sentient Group, an independent private equity firm that manages investments in the global resources industry. Together with certain other funds managed by The Sentient Group, Sentient is the Companys largest stockholder, holding in the aggregate approximately 44% of the Companys issued and outstanding Common Stock prior to the Conversion. Upon Conversion, together with certain other funds managed by The Sentient Group, Sentient
will hold approximately 47%, or 41,590,474 shares of the Companys issued and outstanding Common Stock, which will total 88,920,041 shares of Common Stock outstanding after Conversion.
In connection with the Conversion, the Company entered into a Registration Rights Agreement, dated June 10, 2016 (the
Registration Rights Agreement
), with Sentient pursuant to which the Company agreed to register with the SEC the resale of the Shares. The agreement requires that the Company file a registration statement with the SEC no later than March 31, 2017 and cause such registration statement to be declared effective no later than June 30, 2017. If the Company is unable to meet these deadlines, it may be subject to a penalty equal to 1.0% of the aggregate purchase price paid by Sentient for the Shares for every thirty days following the applicable deadline, up to a maximum amount of 3.0% of the aggregate purchase price. The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the text of the Registration Rights Agreement filed as an exhibit hereto.
The Shares issued as a result of the Conversion will be issued outside the United States pursuant to an exemption from registration under Regulation S under the Securities Act of 1933, as amended.