Baker Steel to Amend and Increase Its Investment IN Azarga Metals
AZARGA METALS CORP.
UNIT 1 – 15782 MARINE DRIVE, WHITE ROCK, B.C. V4B 1E6, CANADA
www.azargametals.com
FOR IMMEDIATE RELEASE
March 16, 2020 TSX-V: AZR
BAKER STEEL TO AMEND AND INCREASE ITS INVESTMENT IN AZARGA METALS
AZARGA METALS CORP. ("Azarga Metals" or the “ Company”) (TSX-V:AZR) is pleased to
announce t hat it has executed a Binding Term Sheet with Baker Steel Resources Trust Ltd.
(“BSRT”), setting out the terms on which BSRT will, subject to satisfaction of certain conditions,
increase its investment in the Company by an additional US$500,000 (“Third Adv ance”) under
the Secured Convertible Loan Facility Agreement (the “Loan Facility”) announced on April 10,
2019 and amend certain terms of the Loan Facility.
Subject to formal documentation of amendments to the Loan Facility and related documentation
(the “Amendments” and, as amended the “Amended Loan Facility”) and the approval of the TSX
Venture Exchange, the Company and BSRT agree that, upon closing of the Amendments (the
“Closing”), each of the following will occur:
1. The principal amount of the Loan Facility will be increased from US$3,000,000 to
US$3,500,000 and BSRT will advance the Third Advance of US$500,000.
2. The conversion price at which the principal amount under the Amended Loan Facility
may be converted into common shares of the Company will be reduced from C$0.14 to
C$0.10.
3. The Company will, upon receipt of the Third Advance of US$500,000, issue such
number of non -transferable share purchase warrants (the “New Warrants”) to BSRT as
is equal to US$500,000 (converted into Canadian dollars at the Bank of Canada closing
exchange rate on the day prior to Closing divided by C$0.10). Each New Warrant will be
exercisable to buy one common share of the Company at an exercise price of C$0.10
until December 31, 2022.
4. The exercise price and expiry date of the existing 13,490,414 warrant s issued to BSRT
on April 12, 2019 (“Warrants”) will be amended from C$0.17 and April 21, 2021 to
C$0.10 and December 31, 2022, respectively (after such amendments, the “Amended
Warrants”).
The funds from BSRT’s additional investment will be used to fund the ongoing exploration
program at the Unkur Project. The goal of the program is to considerably expand the known
mineralized envelope at Unkur.
On Closing, Alexey Mikhaylovskiy (the “Finder”) will be entitled to receive 277,083 common
shares of the Company, being 5% of US$500,000 converted to Canadian dollars at a fixed
exchange rate of US$ = C$1.33 and a share price of C$0.12.
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AZARGA METALS CORP.
UNIT 1 – 15782 MARINE DRIVE, WHITE ROCK, B.C. V4B 1E6, CANADA
www.azargametals.com
All of the estimates in the following paragraphs are approximations based on a current
exchange rate of 1.3901 (“Current Exchange Rate”) and a closing share price of $0.075 on
March 13, 2020 (“Closing Share Price”). Prior to drawdown of the Third Advance of US$500,00
and the Amendments, assuming BSRT: (i) converted the principal amount of US$3,000,000 and
all related interest under the Loan Facility at the current conversion price of C$0.14 per common
share at maturity (December 31, 2022); (ii) exercised all of the 13,490,414 Warrants; (iii) used
the Current Exchange Rate ; and (iv) used the conversion price for the interest of t he Closing
Share Price; it is estimated BSRT would beneficially own and control an aggregate of
59,068,648 common shares of the Company, representing an aggregate beneficial ownership
interest of 39.08% of the issued and outstanding shares of the Company ( post-issuance of the
shares and including the 1,470,443 common shares in the Company that BSRT already owns,
but excluding the shares issuable to the Finder).
Following drawdown of the Third Advance of US$500,000 and assuming BSRT converts all of
the US$3,500,000 owing to it (with the principal conversion price amended from C$0.14 to
C$0.10 and together with the other assumptions referred to above including issuance of the
New Warrants and exercise of the Amended Warrants), BSRT would beneficially own and
control an aggregate of 86,964,736 common shares of the Company, representing an
aggregate beneficial ownership interest of 48.58% of the issued and outstanding shares of the
Company (post -issuance of the shares and including the 1,470,443 common shares in the
Company that BSRT already owns, but excluding the shares issuable to the Finder), reflecting
an increase of 27,896,088 common shares 18.46% of the currently issued and outstanding
shares of the Company (assuming conversion of the Loan Facility and ex ercise of the
Warrants).
About Azarga Metals Corp.
Azarga Metals is a mineral exploration and development company that owns 100% of the Unkur
Copper-Silver Project in the Zabaikalsky administrative region in eastern Russia. On completion
of a first phase physical exploration program in 2016- 2018, the Company estimated an Inferred
Resource of 62 million tonnes at 0.53% copper and 38.6g/t silver for the project in the report
entitled “Technical Report and Preliminary Economic Assessment for the Unkur Copper -Silver
Project, Kodar-Udokan, Russian Federation” dated effective 30, August 2018 authored by Tetra
Tech Mining & Minerals. The Resource remains open in both directions along strike and down-
dip.
BSRT, Arnold House, St Julians Avenue, Guernsey, GY1 1WA, entered into the Binding Term
Sheet for investment purposes. Depending on market conditions and other factors, BSRT may
from time to time acquire and/or dispose of securities of the C ompany or continue to hold its
current position. A copy of the early warning report required to be filed with the applicable
securities commissions in connection with the execution of the Binding Term Sheet will be
available on SEDAR at www.sedar.com and c an be obtained by contacting Tino Isnardi at +44
(0) 20 7389 0009.
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AZARGA METALS CORP.
UNIT 1 – 15782 MARINE DRIVE, WHITE ROCK, B.C. V4B 1E6, CANADA
www.azargametals.com
AZARGA METALS CORP.
"Michael Hopley"
Michael Hopley,
President and Chief Executive Officer
For further information please contact: Doris Meyer, at +1 604 536 -2711 ext. 6, visit
www.azargametals.com, or follow us on Twitter @AzargaMetals. The address of the head office
of Azarga Metals is Unit 1 - 15782 Marine Drive, White Rock, BC V4B 1E6, British Columbia,
Canada.
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.
Cautionary Statement:
This news release contains forward- looking statements that are based on the Company's current
expectations and estimates. Forward- looking statements are frequently characterized by words such as
"plan", "expec t", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other
similar words or statements that certain events or conditions "may" or "will" occur. Such forward- looking
statements involve known and unknown risks, uncertainties and other factors that could cause actual
events or results to differ materially from estimated or anticipated events or results implied or expressed
in such forward- looking statements. Such factors include, among others: the actual results of current
planned exploration activities; conclusions of economic evaluations; changes in project parameters as
plans to continue to be refined; possible variations in mineralization grade or recovery rates; accidents,
labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or
financing; and fluctuations in metal prices . There may be other factors that cause actions, events or
results not to be as anticipated, estimated or intended. Any forward- looking statement speaks only as of
the date on which it is made and, except as may be required by applicable securities laws, the Company
disclaims any intent or obligation to update any forward- looking statement, whether as a result of new
information, future events or results or otherw ise. Forward- looking statements are not a guarantee of
future performance and accordingly undue reliance should not be put on such statements due to the
inherent uncertainty therein.