VANCOUVER, May 15, 2020 /CNW/ - Group Eleven Resources Corp.
(TSX.V: ZNG; OTC: GRLVF; FRA: 3GE) ("Group Eleven" or the
"Company") is pleased to announce it has entered into a
subscription agreement (the "Subscription Agreement") with Glencore
Canada Corporation ("Glencore") on a private placement basis
("Offering"). The Offering consists of 15,000,000 units at a price
of $0.05 per unit for aggregate gross
proceeds of $750,000, to be completed
in two tranches. All currency amounts in this news release are
denominated in Canadian dollars. Glencore is the owner of the
Pallas Green project in Ireland,
which hosts the Pallas Green deposit (an estimated mineral resource
of 45.4 million tonnes of 7% zinc and 1% lead1 in
the Inferred category). Group Eleven's adjacent Stonepark project
hosts the Stonepark zinc deposit (an estimated mineral resource of
5.1 million tonnes grading 8.7% zinc and 2.6%
lead2 in the Inferred category).
Investment Highlights
- Subject to TSX-V and shareholder approval, Glencore will invest
a total of $750,000 to purchase
15,000,000 units in the capital of the Company at a price of
$0.05 per unit
- Each unit will consist of one common share and one half of one
non-transferrable common share purchase warrant; each warrant will
entitle the holder thereof to purchase one additional common share
in the capital of the Company at a price of $0.10 per share for 36 months from the date of
issue
- The private placement is subject to TSX-V approval and will
occur in two tranches - the first tranche of 2,200,000 units
($110,000) is expected to close on or
about May 21, 2020, while the
remaining 12,800,000 units ($640,000), conditional on shareholder approval
of Glencore becoming a "control person" of the Company by virtue of
holding more than 19.99% of the outstanding common shares (which
approval shall exclude any common shares held by Glencore), is
expected to close approximately in late June
2020 upon the Company holding an annual and special meeting
to seek such approval
- Subject to completion of the second tranche of the Offering and
Glencore owning at least 20.0% of the outstanding common shares on
a non-diluted basis, Glencore will have the right to nominate a
second member to Group Eleven's board of directors
Details on the Agreement
Subject to TSX-V and shareholder approval, and pursuant to the
Subscription Agreement, Glencore will purchase 15,000,000 units in
the capital of the Company at a price of $0.05 per unit for total consideration of
$750,000. Pursuant to TSX-V Policies,
Glencore may not own more than 19.99% of the outstanding Common
Shares on a non-diluted basis without approval from the
shareholders of the Company (excluding Glencore), therefore the
Offering will completed in two tranches.
Immediately prior to entering into the Subscription Agreement,
Glencore had ownership and control of 8,400,000 common shares and
4,200,000 warrants to purchase common shares, representing
ownership and control of 11.6% of the outstanding common shares on
a non-diluted basis, or 16.4% on a partially diluted basis.
Completion of the first tranche, totalling 2,200,000 units (for
gross proceeds of $110,000), will
result in Glencore's ownership and control in the Company
increasing to 10,600,000 common shares and 5,300,000 common share
purchase warrants, representing beneficial ownership of 14.2% of
the outstanding common shares (on a non-diluted basis), and 19.9%
on a partially diluted basis (assuming exercise of all 4,200,000
warrants currently held by Glencore and the 1,100,000 additional
warrants acquired in the first tranche of the Offering). The first
tranche of the Offering is expected to close on or about
May 21, 2020.
Completion of the second tranche of the Offering, totalling
12,800,000 units (for gross proceeds of $640,000), will increase Glencore's ownership and
control to an aggregate of 23,400,000 common shares and 11,700,000
common share purchase warrants, representing beneficial ownership
of 26.7% (on a non-diluted basis), and 35.4% on a partially diluted
basis (assuming exercise of all warrants currently held by Glencore
and the aggregate 7,500,000 warrants acquired in the Offering). The
second tranche of the Offering is expected to close in
approximately late June 2020, subject
to approval by shareholders of the Company at an upcoming Annual
General and Special Meeting (details of which to be announced in
due course). The ownership percentages of common shares described
above are based on the Company having 72,559,504 common shares
outstanding as of the date of this news release.
Completion of each tranche of the Offering is respectively
subject to the completion of certain conditions, including
the receipt of all regulatory approvals (including the acceptance
of the Exchange), and the receipt of the approval of the Company's
shareholders for the issuance of the second tranche units and a
resolution approving Glencore becoming a "control person" of the
Company.
Each unit consists of one common share and one-half of one
non-transferable common share purchase warrant. Each whole warrant
will entitle the holder to purchase, for a period of 36 months from
the date of issue, one additional common share of Group Eleven (a
"warrant share") at an exercise price of $0.10 per warrant share. The common shares,
warrants and warrant shares will be subject to a hold period under
applicable Canadian securities legislation that expires four months
and one day after the respective closing date of each tranche of
the Offering.
Group Eleven has covenanted that a maximum of $500,000 of the gross proceeds are to be used for
general corporate purposes, with the balance of the gross proceeds
to be spent on exploration on the Company's zinc projects in
Ireland.
Upon completion of the second tranche of the Offering, the
existing Investor Rights Agreement (dated October 11, 2019), previously announced in the
Company's news release dated October 15,
2019, will be amended to provide Glencore the right to
nominate a second director to the Board, provided Glencore
maintains an equity ownership in the Company above 20.0%.
Glencore is a "related party" of the Company within the meaning
of that term defined in Multilateral Instrument 61-101 -
Protection of Minority Shareholders in Special Transactions
("MI 61-101") as it currently owns more than 10% of the outstanding
common shares on both a non-diluted and partially-diluted basis,
and the Offering is a "related party transaction" within the
meaning of MI 61-101. The Company expects it will file a material
change report less than 21 days before the expected closing date of
the first tranche of the Offering. The Company believes this
shorter period is reasonable and necessary in the circumstances to
take advantage of available financing opportunities and address an
immediate need for financing.
Certain information in this news release is provided by Glencore
in satisfaction of the early warning requirements of National
Instrument 62-104 - Take-Over Bids and Issuer Bids. Glencore
has advised the Company it is acquiring the units for investment
purposes and that it will continue to monitor the business,
prospects, financial condition and potential capital requirements
of the Company. Depending on its evaluation of these and other
factors, Glencore has advised it may from time to time in the
future increase or decrease its direct or indirect ownership,
control or direction over securities of the Company through market
transactions, private agreements, subscriptions from treasury or
otherwise.
Glencore's address is 100 King Street West, Suite 6900, P.O. Box
403, Toronto, Ontario, Canada, M5X
1E3. An early warning report in respect of entering into the
Subscription Agreement will be filed under the Company's profile on
SEDAR at www.sedar.com, and may also be obtained from Glencore by
contacting Alexis Segal at +1 514
239-2527.
The Offering is conducted on a non-brokered basis and no finders
fees will be payable.
Qualified Person
Technical information in this news release has been approved by
David Furlong, P.Geo., Chief
Operating Officer, and a 'Qualified Person' as defined under
Canadian National Instrument 43-101.
About Group Eleven Resources
Group Eleven Resources Corp. (TSX.V: ZNG; OTC: GRLVF and FRA:
3GE) is a mineral exploration company focused on advanced stage
zinc exploration in Ireland. The
Company's key project in Ireland
is a 76.56% interest in the Stonepark project (joint ventured with
Arkle Resources plc) and a 100% interest in the adjacent PG West
Project, located near Limerick,
next to the Pallas Green zinc project, hosting one of the world's
largest undeveloped zinc deposits.
Additional information about the Company is available at
www.groupelevenresources.com.
ON BEHALF OF THE BOARD OF DIRECTORS
Bart Jaworski, P.Geo.
Chief Executive Officer
Cautionary Note Regarding Forward-Looking Information
This press release contains forward-looking statements within
the meaning of applicable securities legislation. Such statements
include, without limitation, statements regarding the satisfaction
of conditions for and the timing for closing of either tranche of
the Offering, the timing for calling and holding the Company's
annual and special meeting of shareholders to approve, among other
things, Glencore becoming a "control person" of the Company,
obtaining Exchange and shareholder approval for the Offering,
future results of operations, performance and achievements of the
Company, including the timing, content, cost and results of
proposed work programs, the discovery and delineation of mineral
deposits/resources/ reserves and geological interpretations.
Although the Company believes that such statements are reasonable,
it can give no assurance that such expectations will prove to be
correct. Forward-looking statements are typically identified by
words such as: believe, expect, anticipate, intend, estimate,
postulate and similar expressions, or are those, which, by their
nature, refer to future events. The Company cautions investors that
any forward-looking statements by the Company are not guarantees of
future results or performance, and that actual results may differ
materially from those in forward looking statements as a result of
various factors, including, but not limited to, regulatory
concerns, the effects of the ongoing COVID-19 public health
emergency, and variations in the nature, quality and quantity of
any mineral deposits that may be located. All of the Company's
public disclosure filings may be accessed via www.sedar.com and
readers are urged to review these materials, including the
technical reports filed with respect to the Company's mineral
properties.
_________________________________
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1 Pallas
Green hosts 45.4 million tonnes of 7% Zn + 1% Pb in the Inferred
Category (Glencore; Dec 31, 2019)
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2
Stonepark hosts 5.1 million tonnes of 8.7% Zn + 2.6% Pb in the
Inferred Category (Group Eleven; NI 43-101 Independent Report on
the Zinc-Lead Exploration Project at Stonepark, County Limerick,
Ireland, April 26th 2018, Authors: John Kelly, SLR Consulting; Paul
Gordon, SLR Consulting; Belinda Van Lente, CSA Global (UK) Ltd.);
Note: Mineralization hosted on adjacent and/or nearby projects is
not indicative of mineralization that may be hosted on the
Company's property.
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SOURCE Group Eleven Resources Corp.