Patagonia Gold announces Conversion of Debt into Common Shares
October 20 2020 - 8:31AM
Patagonia Gold Corp. (“Patagonia” or the
“Company”) (TSXV: PGDC) is pleased to announce that it has entered
into an agreement with Tim Hunt to convert an aggregate of US$10
million of outstanding debt into common shares of the Company (the
“Debt Conversion”) at a price per share that is equal to $0.30.
This price represents a premium of approximately 100% to the
closing price of the common shares on the TSX Venture Exchange (the
“TSXV”) on October 19, 2020, prior to the parties entering into
such agreement.
The debt to be converted in connection with the
Debt Conversion includes US$4,821,835 of principal and accrued
interest owed to Mr. Hunt by the Company, and US$5,178,165 in
accounts payable owed to Mr. Hunt in respect of interest, rent and
administration expenses accrued by the Company. Following the Debt
Conversion, the balance of the US$1,457,807 in accounts payable
owed to Mr. Hunt and a related party to Mr. Hunt in respect of
interest, wages, rent and administration expenses is expected to be
settled in full by December 10, 2020 by a cash payment in the
amount of US$720,397 plus 7% accrued interest.
Christopher van Tienhoven, Chief Executive
Officer states, “The Debt Conversion shows a strong support for the
long-term growth of the Company and is in line with the Company’s
mission of becoming an intermediate mining producer through the
acquisition, exploration and development of gold and silver
projects in South America.”
Completion of the Debt Conversion is subject to
approval of the TSXV and closing is expected to occur within five
business days of the receipt of such approval. Upon completion of
the Debt Conversion, Tim Hunt, a director of Patagonia, is expected
to own or control 97,693,902 common shares in Patagonia,
representing a 27% interest in the Company on an undiluted
basis.
The Debt Conversion is a “related party
transaction” under Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions (“MI
61-101”) because Tim Hunt is a related party to Patagonia
as a director of the Company and a shareholder with an interest of
more than 10%. Pursuant to Section 5.5(b) and 5.7(1)(c) of MI
61-101, the Company is exempt from obtaining a formal valuation and
approval of the Company’s minority shareholders because the
Company’s shares trade on the TSX Venture Exchange and, pursuant to
Section 5.5(e) of MI 61-101, the Debt Conversion is supported by
Carlos Miguens, the Company’s controlling shareholder.
The Company will file a material change report
in respect of the Debt Conversion. However, the material change
report will be filed less than 21 days prior to the closing, which
the Company deems reasonable in the circumstances.
About Patagonia Gold
Patagonia Gold Corp. is a mining and development
company listed on the TSX Venture Exchange. The Company seeks to
grow shareholder value through exploration and development of gold
and silver projects in the Patagonia region of Argentina. The
Company is primarily focused on the Calcatreu project in Rio Negro
and the development of the Cap-Oeste underground project.
Patagonia, indirectly through its subsidiaries or under option
agreements, has mineral rights to over 360 properties in several
provinces of Argentina and Chile and is one of the largest
landholders in the province of Santa Cruz, Argentina.
For more information, please
contact:Dean StuartT: 403 617
7609E: dean@boardmarker.net
Christopher van Tienhoven, Chief Executive
OfficerPatagonia Gold CorpT: +54 11 5278 6950E:
cvantienhoven@patagoniagold.com
FORWARD-LOOKING STATEMENTS
This news release contains certain
forward-looking statements, including, but not limited to,
statements with respect to the Debt Conversion and repayment and
settlement of remaining debt owned to Mr. Hunt and his related
parties. Wherever possible, words such as “may”, “will”, “should”,
“could”, “expect”, “plan”, “intend”, “anticipate”, “believe”,
“estimate”, “predict” or “potential” or the negative or other
variations of these words, or similar words or phrases, have been
used to identify these forward-looking statements. These statements
reflect management’s current beliefs and are based on information
currently available to management as at the date hereof.
Forward-looking statements involve significant
risk, uncertainties and assumptions. Many factors could cause
actual results, performance or achievements to differ materially
from the results discussed or implied in the forward-looking
statements. These factors should be considered carefully and
readers should not place undue reliance on the forward-looking
statements. Although the forward-looking statements contained in
this news release are based upon what management believes to be
reasonable assumptions, the Company cannot assure readers that
actual results will be consistent with these forward-looking
statements. These forward- looking statements are made as of the
date of this news release, and the Company assumes no obligation to
update or revise them to reflect new events or circumstances,
except as required by law.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Patagonia Gold (TSXV:PGDC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Patagonia Gold (TSXV:PGDC)
Historical Stock Chart
From Jul 2023 to Jul 2024