Battery Mineral Resources Corp. Announces First Closing of Previously Announced Offering of up to US$6M in Unsecured Convertible Debentures and Closing of Previously Announced Debt Consolidation
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Battery Mineral Resources Corp. Announces First Closing of Previously
Announced Offering of up to US$6M in Unsecured Convertible Debentures
and Closing of Previously Announced Debt Consolidation
Vancouver, British Columbia – (October 19, 2023) – Battery Mineral Resources Corp.
(TSXV: BMR) (OTCQB: BTRMF) (“Battery” or “BMR” or the “Company”) is pleased
to announce a first closing of the private placement (the “Private Placement”) of
senior unsecured convertible debentures (the “Debentures”), which was previously
press released on October 17, 2023 , for gross proceeds of US$ 1,370,000
(C$1,871,557). The proceeds from the Debentures will be applied towards working
capital and the restart of copper concentrate production at its Punitaqui copper
project in Chile (the “Restart”).
The Company anticipates announcing an additional closing with respect to the Private
Placement in the near-term. The Company paid a cash finder’s fee equal to 6.0% on
US$500,000(C$683,050) of the gross proceeds arising from the first closing of the
Private Placement for an aggregate finder’s fees of US$30,000 (C$40,983).
The Company continues to progress towards securing the balance of the capital
required for the Restart and anticipates sharing further updates in that respect in the
fourth quarter of 2023. The Company estimates the total capital required for the
Restart to be approximately US$13 million (approximately C$17.8 million) (prior to
corporate costs and other asset holding costs and inclusive of amounts to be raised
in the Private Placement).
Offering Terms (as previously announced in the press release dated October
17th, 2023)
The Debentures will mature on September 30, 2026 (the “Maturity Date”) and will
bear interest at 10 % per annum, compounding annually on September 30 of each
year, not in advance. Interest accrued from the date of issuance up to and including
March 30, 2025 will be paid by way of issuance of common shares of the Company.
Interest accrued following March 30, 2025 will be, at the option of the holder, paid
either in cash or by way of issuance of common shares of the Company. The issuance
of common shares as payment of interest will be at the then current market price of
the Company’s common shares at the date the interest becomes payable and will be
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subject to the prior acceptance of the TSX Venture Exchange and applicable securities
laws.
The holder of a Debenture may, at their option, at any time from March 31, 2024 and
prior to the close of business on the business day immediately preceding the Maturity
Date, convert all, but not less than all, of the principal amount of s uch Debenture
into common shares of the Company at the conversion price of US$0.22 per share
(approximately C$0.30 per share).
Debt Consolidation ( as previously announced in the press release dated
October 17th, 2023)
The Company has issued US$15,408,039 (C$21,048,922) in Debentures to holders
of existing indebtedness as part of a comprehensive debt consolidation that will
simplify the Company’s capital structure and extend its near-term debt maturities.
Weston Energy LLC and Weston Energy II LLC, who are existing shareholders of the
Company, have exchange d all their outstanding debt in the Company into
Debentures. This includes US$7,411,960 (C$10,125,478) of convertible debentures
(the “Prior Debentures”) previously held by Weston Energy LLC, a secured bridge
loan of US$5,548,408 (C$7,579,680) (originally announced on October 21, 2022)
previously held by Weston Energy LLC, and an unsecured promissory note of
US$1,889,856 (C$2,581,732) (originally announced on July 5, 2023) previously held
by Weston Energy II LLC, for a total of US$14,850,224 (C$20,286,891), in each case
inclusive of principal and accrued and unpaid interest, that Weston Energy LLC and
Weston Energy II LLC have exchanged into the Debentures.
In addition, all additional holders of the Company’s Prior Debentures exchanged their
Prior Debentures into the Debentures, which total US$557,815 (C$762,031) in
principal and accrued and unpaid interest outstanding.
The debt consolidation and the completion of the Private Placement are expected to
benefit BMR’s balance sheet through an enlarged capital base, an extended term to
maturity of the Company’s debt, the accrual of interest during the anticipated period
of ramp up of copper-silver production at Punitaqui, and through a conversion option
that, if exercised by the Debenture-holders, would significantly reduce the Company’s
financial leverage.
All Debentures issued in the Private Placement and in connection with the debt
consolidation are subject to a four month hold period under applicable Canadian
securities laws and under the policies of the TSX Venture Exchange. The Debenture
issuances are subject to final approval by the TSX Venture Exchange.
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CEO Commentary
Martin Kostuik, Battery’s CEO stated, “The advancement of the Punitaqui Project
towards a resumption of mine operations and copper concentrate production is
absolutely the right choice for our shareholders in terms of setting the stage for
increasing shareholder value. The first closing of the Debentures offering and the
consolidation of our existing debt is an important step towards enabling the Restart.”
Exchange Rates
All USD amounts for which CAD equivalent amounts are given in this news release
were calculated at CAD/USD exchange rate of 1.3661, the exchange rate published
by the Bank of Canada on October 13, 2023 , which was the date of the Company’s
initial news release announcing the Private Placement.
MI 61-101 Matters
Weston Energy LLC and Weston Energy II LLC are “related parties” to BMR pursuant
to pursuant to Multilateral Instrument 61 -101 – Protection of Minority Security
Holders in Special Transactions (“ MI 61 -101“). Prior to giving effect to the
transactions disclosed in this news release, Weston Energy LLC and Weston Energy
II LLC and its affiliates owned or controlled (directly or indirectly) 107,578,740 BMR
Common Shares on an undiluted basis and 122,491,305 BMR Common Shares
assuming the conversion of all Prior Debentures (representing approximately 60.60%
and 63.31%, respectively, of the outstanding BMR Common Shares).
The refinancing of the Weston Energy LLC and Weston Energy II LLC debts through
the issuance of Debentures will constitute a “related party transaction” for the
purposes of MI 61 -101. The refinancing is exempt from the formal valuation
requirements of MI 61 -101 as BMR is not listed on a specified market that would
require compliance with such formal valuation requirements (as set forth in Sec tion
5.5(b) of MI 61-101) and is further exempt from the minority shareholder approval
requirements of MI 61-101 by virtue of Section 5.7(e) of MI 61 -101 which provides
that a related party transaction is exempt from the minority shareholder approval
requirements if the issuer is in serious financial difficulty, the transaction is designed
to improve the financial position of the company (among other criteria) and there is
no other requirement to hold a meeting of shareholders to approve the transaction.
As part of their deliberations in respect of the proposed refinancing, the board of
directors of BMR, including a special committee composed of independent directors,
considered the financial position of BMR and the objectives of the proposed
refinancing transactions, and the criteria and conditions with respect to the financial
hardship exemptions described above, including the fact that there is no requirement,
corporate or otherwise, to hold a meeting to obtain any approval of the holders of
BMR Common Shares for such transactions.
Disclaimers
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The Debentures (including any issued in future closings) will be sold in a transaction
exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act ”) and will be sold only to persons re asonably believed to be
accredited investors in the United States under Rule 506 under the Securities Act and
outside the United States only to non-U.S. persons in accordance with Regulation S
under the Securities Act.
The Debentures and the shares of com mon stock issuable upon conversion of the
Debentures, if any, have not been and will not be registered under the Securities Act,
or any state securities laws, and unless so registered, may not be offered or sold in
the United States except pursuant to an applicable exemption from such registration
requirements of the Securities Act and applicable state securities laws.
This press release does not constitute an offer to sell or a solicitation of an offer to
buy any of the Debentures or any shares of common stock potentially issuable upon
conversion of the Debentures nor shall there be any sale of Debentures (or shares
issuable upon conversion thereof) in any state or other jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or qualification under
the securities laws of such state.
There can be no assurance that any future offerings of Debentures will be completed.
About Battery Mineral Resources Corp.
Battery Mineral Resources is a battery minerals company providing shareholders
exposure to the global mega -trend of electrification while being focused on growth
through cash-flow, exploration, and acquisitions in favourable mining jurisdictions.
Battery Mineral’s mission is the discovery, acquisition, and deve lopment of battery
metals (namely cobalt, lithium, graphite, and copper), in North America, South
America and South Korea and to become a premier and responsible supplier of
battery minerals to the electrification marketplace. BMR is currently pursuing a near-
term resumption of operations of the Punitaqui Mining Complex, a past copper-gold-
silver producer, in the Coquimbo region of Chile. BMR is the largest mineral claim
holder in the historic Gowganda Cobalt -Silver Camp in Ontario, Canada, and
continues to pursue a focused program to build on the recently announced, +1 -
million-pound high-grade cobalt resource at McAra. In addition, Battery Mineral owns
100% of ESI Energy Services, Inc. (including ESI’s wholly owned USA operating
subsidiary, Ozzie’s, Inc.), a profitable mainline pipeline and renewable energy
equipment rental and sales company with operations in Alberta, Canada and Arizona,
USA. Battery Mineral Resources is based in Canada and its shares are listed on the
Toronto Venture Exchange under the symbol “BMR” and on the OTCQB under the
symbol “BTRMF”. Further information about BMR and its projects can be found on
www.bmrcorp.com.
For more information, please contact:
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Martin Kostuik, CEO
Phone: +1 (604) 229 3830
Corporate Communications
IBN (InvestorBrandNetwork)
www.investorbrandnetwork.com/
310.299.1717 Office
Twitter: @BMRcorp_
Facebook: Battery Mineral Resources Corp. | Facebook
LinkedIn: Battery Mineral Resources Corp.: My Company | LinkedIn
Website: www.bmrcorp.com
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the
policies of the TSXV) accepts responsibility for the adequacy or accuracy of this
press release.
Forward Looking Statements
This news release includes certain “forward -looking statements” under applicable
securities laws. There can be no assurance that such statements will prove to be
accurate, and actual results and future events could differ materially from those
anticipated in such statements. Forward -looking statements reflect the beliefs,
opinions and projections of the Company on the date the statements are made and
are based upon a number of assumptions and estimates that, while considered
reasonable by the Company, are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. Many factors, both
known and unknown, could cause actual results, performance, or achievements to be
materially different from the results, performance or achievements that are or may
be expressed or implied by such forward -looking statements and the parties have
made assumptions and estimates based on or related to many of these factors. Such
factors include, without limitation, the abili ty of the Company to obtain sufficient
financing (including through the Private Placement) to complete exploration and
development activities, the ability of the Company to close further tranches of the
Private Placement, the completion, timing and size of the proposed Private
Placement, the intended use of the proceeds of the Private Placement, risks related
to share price and market conditions, the inherent risks involved in the mining,
exploration and development of mineral properties, the ability of the Company to
meet its anticipated development schedule, government regulation and fluctuating
metal prices. Accordingly, readers should not place undue reliance on forward-looking
statements. Battery undertakes no obligation to update publicly or otherwise revise
any forward -looking statements contained herein, whether as a result of new
information or future events or otherwise, except as may be required by law. For
further information regarding the risks please refer to the risk factors discussed in
Battery’s most recent Management Discussion and Analysis filed on SEDAR+.