NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
VANCOUVER, BC / ACCESSWIRE / August 15, 2024 / Gold Mountain Mining Corp. (“ Goldberg ” or the “ Pursue “) (TSX:GMTN)(OTCQB:GMTNF)(FRA:5XFA) announces that it has raised US$6.5 million through the issuance of convertible secured debentures (the “ Convertible bond “) to a choomEEnsh a Nlaka’pamux LP (the “ investor “). The Convertible Debenture is convertible into 81,250,000 Common Shares at the Investor’s option at a conversion price of $0.08 per share. The Convertible Debenture matures on a date ten (10) years after the date of issuance and bears interest at a rate of 10.0% per annum, calculated monthly and payable in cash in arrears on each anniversary of the date of issuance. The Convertible Debentures may be prepaid in whole or in part at the Company’s option. The Investor is an affiliate of Nhwelmen Construction GP Ltd. (“ Nhwelmen “), who is an existing insider of the Company. Nhwelmen currently holds a Convertible Note secured by a second priority security interest in all of the assets of the Company, including its current and subsequently acquired property, and the security for the Convertible Note is evidenced by the general security agreement dated March 10, 2024 between the Company and Nhwelmen. The offering of the Convertible Note is subject to customary closing conditions, including final listing on the Toronto Stock Exchange (“ TSX “) Permit.
The maximum number of securities to be issued upon conversion of the Convertible Bonds is 81,250,000 common shares, representing 10.24% of the Company’s issued and outstanding common shares on a non-diluted basis prior to the transaction. The above transaction was negotiated on arm’s length terms and does not have any impact on control.
Insider participation
Nhwelmen currently owns 216,666,667 common shares of the Company, representing approximately 27.30% of the issued and outstanding common shares of the Company and is therefore an “insider” of the Company as defined in the TSX Company Manual and a “related party” of the Company as defined in Multilateral Instrument 61-101 – Protection of minority shareholders in special transactions (“ MI61-101 “). As an affiliate of Nhwelmen, the Investor will also be considered an “insider” of the Company as defined in the TSX Company Manual and a “related party” of the Company as defined in MI 61-101. Upon full conversion of the Convertible Debenture, Nhwelmen and its affiliates, as Investor, would own 297,916,667 Common Shares, representing 34.05% of the Company’s Common Shares on a non-diluted basis.
The issuance of the Convertible Debenture to the Investor is a “related party transaction” within the meaning of MI 61-101. The Company’s Special Committee (as defined below) has determined that the Company meets the financial difficulty requirements under Section 5.5(g) or Section 5.7(1)(e) of MI 61-101, as the Convertible Debenture is intended to improve the Company’s financial position and the terms of the transaction are reasonable in the Company’s circumstances.
Special Committee
A special committee of the Board of Directors of the Company (the “ Special Committee “) was established and examined the appropriateness of the Convertible Bond and related matters. The Special Committee consists of the independent directors. The Special Committee has determined that the Convertible Bond is appropriate for the Company in the circumstances and recommends that the Company proceed with the issue of the Convertible Bond.
Consent of the security holder
Pursuant to Section 604(a)(ii) and Section 607(g)(ii) of the TSX Company Manual, the TSX requires security holder consent to the issuance of the Convertible Debenture because the Company is providing consideration to the investor who is an associate of a current insider of the Company in the aggregate of 10% or more of the market capitalization of the Company for any six month period. Rather than seeking security holder consent at a duly called meeting of security holders, the TSX will permit the Company, pursuant to Section 604(d) of the TSX Company Manual, to submit written evidence of more than 50% of the voting securities of the Company held by unbiased shareholders who are familiar with the terms of the transactions. The unbiased shareholder vote excludes the 216,666,667 common shares of the Company currently held by Nhwelmen, representing approximately 27.30% of the issued and outstanding common shares of the Company.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the U.S. Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.
About Gold Mountain
Gold Mountain is a British Columbia-based gold and silver production, exploration and development company focused on the development of the Elk Gold Mine, a producing mine located 57 kilometres from Merritt in south-central British Columbia. For more information, visit www.sedar.com or on the company’s new website at www.gold-mountain.ca .
For further information please contact:
Gold Mountain Mining Corp.
Calvin Cheung, CFO
E-mail: (email protected)
Website: www.gold-mountain.ca
Twitter: Twitter: “Goldmtnmine”
Forward-looking statements
This news release contains certain “forward-looking statements” within the meaning of applicable Canadian securities legislation regarding the completion and timing of the Convertible Debenture, the ability of the Company to continue operations, the impact of the Convertible Debenture issuance on the Company and its results, including that it will enable the Company to address its significant working capital deficiency and provide working capital to continue as a viable operation, the receipt of regulatory and TSX approvals and the ability of the Company to proceed with the restart of the mine and thereby significantly improve the financial position of the Company. Forward-looking statements include statements that are based on assumptions as of the date of this press release and are not purely historical in nature, including all information regarding statements of beliefs, plans, expectations or intentions regarding the future and often, but not always, use words or terms such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends” or include statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors that may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. These factors include, among others: general business, economic, competitive, political and social uncertainties; delay or failure to obtain board, shareholder or regulatory approvals; the price of gold; and the results of current exploration. There can be no assurance that such 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. Gold Mountain disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release.
SOURCE: Gold Mountain Mining Corp
