Nemaska Lithium Inc. (“
Nemaska Lithium” or the
“
Corporation”) (TSX: NMX) (OTCQX: NMKEF)
(Frankfurt: N0T) informs the market that, pursuant to
Article 13.9 of the Bond terms, the Corporation has informed
the Nordic Trustee that it acknowledges the set-off of the
USD 350M nominal amount of the Senior Secured Bonds issued
pursuant to the bond offering announced on May 10, 2018
(
the “Bonds”), together with accrued interest up
to September 16, 2019, with all obligations of the Corporation
under the Bond terms being extinguished as of such date. Following
the publication of the updated National Instrument (NI) 43–101
Technical Report on July 31st, 2019, a Project Completion Cut-Off
Event, as defined in the Bond terms, was triggered as a result of
the overall project completion date being delayed to later than
June 2021 without the Bond terms being amended. Under the Bond
terms, upon the occurrence of a Project Completion Cut-Off Event,
any remaining proceeds from the Bonds issuance held in the escrow
account shall be set-off against and used to prepay the Bonds
within 45 days following the notice of the Project Completion
Cut-Off Event, and the Nordic Trustee is authorized and obligated
to take all necessary measures to effectuate such prepayment.
Between July 31, 2019 and last week, the
Corporation was engaged in active discussions with the Nordic
Trustee and a majority of Bondholders being part of an Ad Hoc
Committee, the latter being represented by a Toronto law firm, in
order to possibly find a common ground for the amendments to the
Bond terms that would have been required in order to keep in place
the USD 350M Bonds. However, based on several key elements
during the discussions, the Corporation took the decision not to
pursue this avenue and to inform the Nordic Trustee and the Ad Hoc
Committee with their counsel that it acknowledged the set-off of
the Bonds and the prescribed prepayment according to the Bond Terms
following the Project Completion Cut-Off Event. The Nordic Trustee
controls the escrow account in which amounts owed to Bondholders
are held and the prescribed reimbursement process of amounts owed
to Bondholders resulting from the set-off under the Bond terms.
“Since the proceeds were held in a trust account
and the Corporation could not access them at this stage, the
set-off and related prescribed reimbursement of the Bonds has
certain positive implications for the Corporation in the short term
by allowing it to save payment of interests on the Bonds. The
savings on interest, coupled with the capacity to eventually use
the CAD 40M of cash and cash equivalents that is sitting in a
cost overrun account required under the Bond terms, will allow us
to continue advancing the project while we carry on our discussions
and negotiations to attain a more suitable capital structure in
light of the actual market conditions. We have solid relationships
with our strategic partners and stakeholders and are confident that
we should be able to put everything in place to successfully
complete the construction and commissioning of the project as
expected,” said Guy Bourassa, President and Chief Executive Officer
of Nemaska Lithium.
At the end of the fiscal year that ended June
30, 2019, Nemaska Lithium still had, on a consolidated basis, about
CAD 128M of unrestricted cash and cash equivalents on hand
(excluding also the restricted cash and cash equivalents of CAD 40M
sitting in a cost overrun account) to finance its current
activities which are mainly focused on site preparation at
Whabouchi mine, advancing detailed engineering at both sites and
completing project execution planning. To view the most recent
pictures of the project, visit Nemaska Lithium’s website at
www.nemaskalithium.com.
Nemaska Lithium filed on September 16, 2019 an
application with the Superior Court of Québec, in connection with
its arrangement proceedings under the Canada Business Corporations
Act, seeking the discharge of the security which secured the
Bonds.
On September 17, 2019, Nemaska Lithium was made
aware of a notice of a written Bondholders’ resolution published by
the Nordic Trustee without the Corporation’s consent, seeking
approval of Bondholders by way of a written resolution to instruct
the Nordic Trustee to refrain from exercising, commencing or
proceeding against the Corporation with respect to, among other
things, any right to set-off and effect any prepayment of the
Bonds. The Corporation has advised the Nordic Trustee that it
considers the proposed resolution invalid with no effect for the
Corporation or under the Bond terms and requesting the Nordic
Trustee to withdraw such notice.
Ongoing Discussions with The
Pallinghurst Group
Nemaska Lithium is still working closely with
The Pallinghurst Group (‘Pallinghurst’) on the
investment proposal of up to CAD 600 M announced on July
19, 2019. Pallinghurst was informed of the set-off and related
prescribed reimbursement and confirmed that it remains willing to
continue the due diligence for its proposed investment in Nemaska
Lithium. The Corporation has agreed to exclusive discussions with
Pallinghurst until October 19, 2019 (unless further extended by the
parties). The Corporation is working to ensure that the Whabouchi
mine and Shawinigan plant will be fully funded through a financing
package that provides reasonable financial flexibility in order to
allow the project to reach nameplate capacity. Nemaska Lithium’s
current strategic partners, including Investissement Québec and
Softbank Group, have also been involved in discussions.
Additional details regarding the discharge of
the security which secured the Bonds and the financing package will
be communicated when available.
About Nemaska Lithium
Nemaska Lithium Inc. is a developing chemical
company whose activities will be vertically integrated, from
spodumene mining to the commercialization of high-purity lithium
hydroxide. These lithium salts are mainly destined for the
fast-growing lithium-ion battery market, which is driven by the
increasing demand for electric vehicles and energy storage
worldwide. With its products and processes, the Corporation intends
to facilitate access to green energy, for the benefit of
humanity.
The Corporation will be operating the Whabouchi
mine in Québec, Canada, one of the richest lithium spodumene
deposits in the world, both in volume and grade. The spodumene
concentrate produced at the Whabouchi mine will be processed at the
Shawinigan plant using a unique membrane electrolysis process for
which the Corporation holds several patents.
The Corporation is a member of the S&P/TSX
SmallCap Index, S&P/TSX Global Mining Index, S&P/TSX Global
Base Metals Index, S&P/TSX Equal Weight Global Base Metals
Index, and the MSCI Canada Small Cap Index. For more information,
visit www.nemaskalithium.com.
Cautionary Statement on Forward-Looking
Information
All statements, other than statements of
historical fact, contained in this press release including, but not
limited to, those relating to the set-off and prescribed
reimbursement of the Bonds, the Court application for the discharge
of the security securing the Bonds and related outcome, the
invalidity of the proposed resolution published by the Nordic
Trustee with no effect for the Corporation or under the Bond terms,
the additional capital required to enable the Corporation to
complete construction and the estimated additional costs for
completing the construction of the Whabouchi mine and the
Shawinigan plant, constitute ‘forward-looking information’ and
‘forward-looking statements’ within the meaning of certain
securities laws and are based on expectations and projections as of
the date of this press release. Certain important assumptions by
the Corporation in making forward-looking statements include, but
are not limited to, (A) the outcome of Court proceedings for the
discharge of the security which secured the Bonds, (B) the
prescribed reimbursement process of the Bonds’ nominal amount and
such process having positive implications for the Corporation, (C)
the interest savings and eventual use of the cost overrun account’s
cash and cash equivalents allowing the Corporation to advance the
project, and (D) the solidity of the Corporation’s relationships
with its strategic partners and stakeholders allowing it to put
everything in place to successfully complete the construction and
commissioning of the project.
Forward-looking statements contained in this
press release include, without limitation, those related to (i) the
ability of the Corporation to obtain Court approval for the
discharge of security securing the Bonds and potential dispute with
respect to the set-off and timing of the prescribed reimbursement
of the Bonds, (ii) the ability of the Corporation to secure
additional funds, (iii) the discussions and negotiations to attain
a more suitable capital structure in light of the actual market
conditions, (iv) Pallinghurst’s willingness to pursue its proposed
investment in the Corporation, (v) the Corporation working closely
to ensure the project will be fully funded through a financing
package that will provide reasonable financial flexibility in order
to allow the project to reach nameplate capacity, (vi)
Investissement Québec and SoftBank Group also being involved in the
financing discussions, and (vii) generally, the above ‘About
Nemaska Lithium’ paragraph which essentially describes the
Corporation’s outlook. Forward-looking statements are based on
expectations, estimates and projections as of the time of this
press release. Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered
reasonable by the Corporation as of the time of such statements,
are inherently subject to significant business, economic and
competitive uncertainties and contingencies. These estimates and
assumptions may prove to be incorrect.
Many of these uncertainties and contingencies
can directly or indirectly affect, and could cause, actual results
to differ materially from those expressed or implied in any
forward-looking statements. There can be no assurance that the
Court proceedings seeking the discharge of the security securing
the Bonds will be successful, that the Pallinghurst investment will
close or that other funding/strategic alternatives can be
available, that the Corporation will meet conditions under the
streaming facility and that the Whabouchi mine and/or the
electrochemical plant in Shawinigan will be commissioned and will
begin production, as future events could differ materially what is
currently anticipated by the Corporation. In addition, there can be
no assurances that the financing discussions with Pallinghurst,
Investissement Québec and SoftBank Group will lead to a
comprehensive financing package in place to successfully complete
the construction and commissioning of the project. In addition,
there can be no assurances that the acknowledgment of the set-off
and related prescribed reimbursement of the Bonds will not result
in litigation involving Bondholders, the Nordic Trustee and/or the
Corporation, notably in light of the notice published by the Nordic
Trustee and response of the Corporation claiming the invalidity of
such notice.
By their very nature, forward-looking statements
involve inherent risks and uncertainties, both general and
specific, and risks exist that estimates, forecasts, projections
and other forward-looking statements will not be achieved or that
assumptions do not reflect future experience. Forward-looking
statements are provided for the purpose of providing information
about management’s expectations and plans relating to the future.
Readers are cautioned not to place undue reliance on these
forward-looking statements as a number of important risk factors
and future events could cause the actual outcomes to differ
materially from the beliefs, plans, objectives, expectations,
anticipations, estimates, assumptions and intentions expressed in
such forward-looking statements. All of the forward-looking
statements made in this press release are qualified by these
cautionary statements and those made in our other filings with the
securities regulators of Canada including, but not limited to, the
cautionary statements made in the ‘Risk Factors’ section of the
Corporation’s Annual Information Form dated October 10, 2018, and
the ‘Risk Exposure and Management’ section of the Corporation’s
quarterly Management Discussion & Analysis. The Corporation
cautions that the foregoing list of factors that may affect future
results is not exhaustive, and new, unforeseeable risks may arise
from time to time. The Corporation disclaims any intention or
obligation to update or revise any forward-looking statements or to
explain any material difference between subsequent actual events
and such forward-looking statements, except to the extent required
by applicable law.
Further information regarding Nemaska Lithium is
available in the SEDAR database (www.sedar.com) and on the
Corporation’s website at: www.nemaskalithium.com.
FOR FURTHER INFORMATION, PLEASE
CONTACT:
Victor CantoreInvestor
Relations514 831-3809victor.cantore@nemaskalithium.com |
Wanda Cutler Investor Relations416 303-6460
wanda.cutler@nemaskalithium.com |
Gabrielle TellierMedia
Relations514 348-0466gabrielle.tellier@nemaskalithium.com |
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