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Subscription Receipts and Convertible Bridge
Loan Converted into Common Shares
TORONTO, March 29, 2019 /CNW/ - Mandalay Resources
Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF)
is pleased to announce that shareholders of the Company have
approved (i) the conversion of 359,400,000 subscription receipts
(the "Subscription Receipts") into 359,400,000 common shares of the
Company (the "Common Shares") and (ii) the conversion of an
US$8 million convertible bridge loan
(the "Bridge Loan") provided by an affiliate of CE Mining Fund III
L.P. ("CE Mining") to the Company on February 20, 2019, into 99,362,963 Common Shares.
The Subscription Receipts were issued pursuant to an overnight
marketed public offering which closed on February 20, 2019 (the "Public Offering", and
collectively with the Bridge Loan, the "Financing"). Shareholders
also ratified the waiver of the application of the Company's
amended and restated shareholder rights plan to the Financing (the
"Rights Plan Waiver"). For further details regarding the Financing,
please refer to the Company's press releases dated February 11, 12, and 20, 2019.
Dominic Duffy, President and
Chief Executive Officer of Mandalay commented, "We are pleased with
the overwhelmingly positive result of the shareholder vote to
approve the Financing. We appreciate the support and confidence of
our shareholders – from those participating in the Financing, to
those who voted to approve it. With this financing now complete,
Mandalay is able to not only meet all of its liquidity requirements
but now has the financial footing to grow both its production and
exploration profiles. We are focused on putting these funds to work
to improve on operations, to create value for all of our
shareholders through exploration, and to lay the foundation for an
exciting future which begins with a return to being a profitable,
producing mining company by the end of 2019."
At the special meeting of shareholders held on March 29, 2019, the Minority Shareholders (as
such term is defined in the management information circular dated
March 1, 2019 (the "Circular")) of
Mandalay voted 99% in favour of approving a resolution authorizing
the conversion of the Subscription Receipts and the Bridge Loan
into a total of 458,762,963 Common Shares, as well as the Rights
Plan Waiver, all as more fully described in the Circular. A total
of 79,329,853 Common Shares held by Minority Shareholders,
representing 17.59% of the total number of outstanding Common
Shares, were voted at the special meeting.
The Company and the underwriters of the Public Offering have
provided notice to Computershare Trust Company of Canada, in its capacity as subscription
receipt agent for the Subscription Receipts, that all escrow
release conditions for the conversion of the Subscription Receipts
have been satisfied and as a result, the 359,400,000 Subscription
Receipts have been automatically converted (for no additional
consideration) into Common Shares and the net proceeds from the
sale of the Subscription Receipts (after paying the commission and
expenses of the underwriters in connection with the Public
Offering) of approximately CAD$40.8
million will be released to the Company. In addition, in
accordance with the terms of the Bridge Loan, the full principal
amount of the Bridge Loan has been automatically converted into
99,362,963 Common Shares, which remain subject to a four month hold
period under applicable securities laws.
The net proceeds raised from the Financing are intended to fund
working capital requirements (including capital development work at
Costerfield, and tailings upgrade and capital development
requirements at Björkdal), debt restructuring (including
establishing cash reserves relating to the outstanding senior
exchangeable gold bonds and the Company's revolving credit
facilities); future planned exploration activities at high
potential areas including at Costerfield, the Youle lode and deeper
hole targets, and the emerging Aurora
Zone at Björkdal; and for general corporate purposes.
After giving effect to the conversion of the Subscription
Receipts and the Bridge Loan, there are a total of 910,358,840
Common Shares issued and outstanding. CE Mining is now the
Company's largest shareholder, and owns 232,362,963 Common Shares
or 25.52% of the issued and outstanding Common Shares. Under the
terms of the Bridge Loan, CE Mining now has the right to nominate
an additional member of Mandalay's board of directors (the
"Board"). Mandalay anticipates that this additional nominee will be
included in the slate of directors proposed for election at its
2019 annual meeting of shareholders (the "AGM") and will join the
Board at the conclusion of the AGM.
In its press release of March 14,
2019, the Company disclosed that it intended to discharge
its obligation under the terms of the Bridge Loan to arrange for
the sale of approximately 28.3 million Common Shares held by
Bradford A. Mills, the Chairman of
the Board, and Plinian Capital Limited ("Plinian"), an entity
controlled by Mr. Mills, by repurchasing these Common Shares
following the conversion of the Subscription Receipts. Subsequent
to that announcement, Mr. Mills and Plinian sold all of these
Common Shares to third parties, which satisfied Mandalay's
obligations. Accordingly, the previously announced repurchase of
the Common Shares is not necessary and will not be proceeding, and
the funds that would have been required to complete the repurchase
will be retained by Mandalay and are available to be deployed for
the uses of proceeds noted above.
About Mandalay Resources Corporation:
Mandalay is a Canadian-based natural resource company with
producing assets in Australia and
Sweden, and care and maintenance
and development projects in Chile.
The Company is focused on growing production at its gold and
antimony operation in Australia,
and gold production from its operation in Sweden to generate near term cash flow.
Forward-Looking Statements:
This news release may contain "forward-looking statements"
within the meaning of applicable securities laws. Readers are
cautioned not to place undue reliance on forward-looking
statements. Actual results and developments may differ materially
from those contemplated by these statements. There can be no
assurance that Mandalay will be able to continue to operate as a
going concern even with the completion of the Financing and the
satisfaction of the escrow release conditions. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. The factors
identified above are not intended to represent a complete list of
the factors that could affect Mandalay. A description of additional
risks that could result in actual results and developments
differing from those contemplated by forward-looking statements in
this news release can be found under the heading "Risk Factors" in
Mandalay's annual information form dated March 28, 2019, a copy of which is available
under Mandalay's profile at www.sedar.com and in the prospectus
supplement filed on February 12, 2019
by Mandalay pursuant to its (final) short form base shelf
prospectus dated February 12, 2018 in
connection with the Public Offering. Although Mandalay has
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward looking statements.
SOURCE Mandalay Resources Corporation