Euro Sun Mining Inc. (TSX: ESM) (“Euro Sun” or the
“Company”) is pleased to announce that it has entered into a
convertible security funding agreement (the “Agreement”) with Lind
Global Fund II, LP, an investment entity managed by The Lind
Partners, a New York based institutional fund manager (together
“Lind”), providing for an initial principal amount of $3.5 million
and a potential additional amount of up to $1.5 million
(collectivity, the “Loan Amount”) of convertible securities (the
“Convertible Securities”) that will be due two years from the date
of issuance. All amounts are in Canadian dollars unless otherwise
indicated.
Euro Sun intends to use the funding for development expenditures
at its Rovina Valley Project and for general and corporate working
capital purposes.
Scott Moore, CEO stated, “We are pleased to have
The Lind Partners support Euro Sun as we continue to make
significant progress on permitting the Rovina Valley Project. Our
updated feasibility study outlines a robust long-life project
adhering to the highest environmental standards and utilizing zero
cyanide. We look forward to continued success in advancing all the
required permitting for construction.”
Under the terms of the Agreement, the drawn Loan
Amount will accrue simple interest at a rate of 10% per annum. At
the first closing, the Company will receive $3.5 million less a
closing fee of $122,500 (the “Initial Loan Amount”). The Company
will issue to Lind a Convertible Security with a face value of $4.2
million (the “Initial Loan Face Value”), which includes pre-paid
interest of $700,000, as set out in the Agreement. Subject to
mutual agreement among Lind and the Company and certain other
conditions, upon the request of Euro Sun, Lind may provide a second
tranche of up to $1.5 million on the same terms and conditions as
the Initial Loan Amount.
Lind will have the option to convert the
Convertible Securities into common shares of Euro Sun (“Shares”) at
a price per Share equal to 85% of the five-day volume weighted
average share price (“VWAP”) immediately prior to each conversion
(the “Conversion Price”). Subject to certain conditions, Lind will
be entitled to convert up to 1/24th of the Initial Loan Face Value
per month into Shares.
In the event that the Conversion Price is below
the Company’s chosen floor price of $0.10, the Company will have
the option to repay that conversion in cash (plus a 5% premium), in
lieu of issuing Shares.
Euro Sun has the right to buy-back the
outstanding face value of the Loan Amount at any time with no
penalty. If Euro Sun elects to exercise its buy-back rights, Lind
will have the option to convert up to 33% of such face value.
Concurrently with the funding of the Initial
Loan Amount, Lind will be issued 7,947,321 warrants of the Company
(the “Warrants”). The Warrants will be exercisable for 48 months
from the date of their issuance, subject to acceleration, with a
warrant exercise price equal to $ 0.28626, being 130% of the 20-day
VWAP of the Shares, immediately prior to execution of the
Agreement.
The Convertible Security will be (i) secured
against all of the assets and property of the Company pursuant to a
general security agreement and (ii) guaranteed by SAMAX Romania
Limited, a wholly-owned subsidiary of the Company organized under
the laws of Cyprus, which will also provide a share pledge
agreement in favour of Lind.
The Toronto Stock Exchange
(“TSX”) has conditionally approved the listing of
the common shares underlying the Convertible Securities and the
Warrants on the TSX. The listing is subject to the Company
fulfilling all of the requirements of the TSX on or before March 7,
2022. Funding of the Initial Loan Amount is expected to be
completed on or before February 25, 2022.
Permitting Update
The Company is currently completing the final
draft of the Planul Urbanistic Zonal (PUZ, Urban Zoning Plan) and
expects to file with the County of Hunedoara in the coming weeks.
Following submittal there is a mandatory 45 day waiting period
before the public audience can be held on the Strategic
Environmental Assessment (“SEA”) organized by the
environmental protection agency of Hunedoara County. The SEA is the
environmental opinion on the PUZ and incorporates approvals from
approximately seventeen government bodies and institutions. We
expect a positive decision on the SEA and final approval of the PUZ
in late Q2 or early in Q3 2022. Once the PUZ has been approved,
submittal of the notification to complete the Environmental Impact
Assessment (EIA) procedure will be filed with the Ministry of
Environment.
This press release shall not constitute
an offer to sell or a solicitation of an offer to buy the
securities described herein. The securities offered have not been
registered under the United States Securities Act of 1933, as
amended (the “U.S. Securities Act”), or applicable state securities
laws, and may not be offered or sold to, or for the account or
benefit of, persons in the United States or U.S. persons (as both
such terms are defined in Regulation S promulgated under the U.S.
Securities Act) absent registration or an applicable exemption from
such registration requirements. This press release shall not
constitute an offer to sell or a solicitation of an offer to buy
nor shall there be any sale of the securities offered in any
jurisdiction in which such offer, solicitation, or sale would be
unlawful.
About Euro Sun Mining Inc.
Euro Sun is a Toronto Stock Exchange listed mining company
focused on the exploration and development of its 100%-owned Rovina
Valley gold and copper project located in west-central Romania,
which hosts the second largest gold deposit in Europe.
For further information about Euro Sun Mining,
or the contents of this press release, please contact Investor
Relations at info@eurosunmining.com.
About The Lind Partners
The Lind Partners manages institutional funds
that are leaders in providing growth capital to small- and mid-cap
companies publicly traded in the US, Canada, Australia and the UK.
Lind’s funds make direct investments ranging from US$1 to US$30
million, invest in syndicated equity offerings and selectively buy
on market. Having completed more than 100 direct investments
totaling over US$1 Billion in transaction value, Lind’s funds have
been flexible and supportive capital partners to investee companies
since 2011.
www.thelindpartners.com
Caution regarding forward-looking
information:
This press release contains statements which
constitute “forward-looking information” within the meaning of
applicable securities laws, including statements regarding the
plans, intentions, beliefs and current expectations of the Company
with respect to future business activities and operating
performance. Forward-looking information is often identified by the
words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”,
“anticipate”, “believe”, “estimate”, “expect” or similar
expressions and includes information regarding the Company’s
proposed use of proceeds, the ability of the Company to secure any
portion of the Loan Amount, the ability of the Company to obtain
final approval of the TSX, the timing for closing the first tranche
of funding and the funding timeline.
Investors are cautioned that forward-looking
information is not based on historical facts but instead reflect
management’s expectations, estimates or projections concerning
future results or events based on the opinions, assumptions and
estimates of management considered reasonable at the date the
statements are made. Although the Company believes that the
expectations reflected in such forward-looking information are
reasonable, such information involves risks and uncertainties, and
undue reliance should not be placed on such information, as unknown
or unpredictable factors could have material adverse effects on
future results, performance or achievements of the Company. This
forward-looking information may be affected by risks and
uncertainties in the combined business of the Company and market
conditions, including (1) a significant change in
market price; (2) there being no significant disruptions affecting
the Company’s operations whether due to extreme weather events and
other or related natural disasters, labor disruptions, supply
disruptions, power disruptions, damage to equipment or otherwise;
(3) permitting, development, operations and production for the
Rovina Valley Project being consistent with the Company’s
expectations; (4) political and legal developments in Romania being
consistent with current expectations; (5) certain price assumptions
for gold and copper; (6) prices for diesel, electricity and other
key supplies being approximately consistent with current levels;
(7) the accuracy of the Company’s mineral reserve and mineral
resource estimates; and (8) labor and materials costs increasing on
a basis consistent with the Company’s current expectations. This
information is qualified in its entirety by cautionary statements
and risk factor disclosure contained in filings made by the Company
with the Canadian securities regulators, including the Company’s
annual information form, financial statements and related MD&A
for the financial year ended December 31, 2020 filed with the
securities regulatory authorities in certain provinces of Canada
and available at www.sedar.com.
Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking information prove incorrect, actual results may
vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Although the Company
has attempted to identify important risks, uncertainties and
factors which could cause actual results to differ materially,
there may be others that cause results not to be as anticipated,
estimated or intended. The Company does not intend, and do not
assume any obligation, to update this forward-looking information
except as otherwise required by applicable law.
The TSX does not accept responsibility for the
adequacy or accuracy of this news release.
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