Liberty Silver Corp. Announces Amendments to the Loan Facility with BG Capital Group Ltd and Loan Conversion
Liberty Silver Corp. Announces Amendments to the Loan Facility with
BG Capital Group Ltd and Loan Conversion
January 23, 2017 - Toronto, Ontario. Liberty Silver Corp. (“ Liberty” or the
“Company”) is pleased to announce that on January 20, 2017 it reached an agreement
with BG Capital Group Ltd. (“ BGCG”) to amend the loan agreement among the
Company and BGCG effective as of November 14, 2013 and amended and restated
effective October 15, 2014 (the “ 2014 Loan Agreement ”), the terms of which were
previously disclosed in Company’s press release of October 17, 2014.
Under the terms of the agreed upon amendments (the “ Amendment”), the principal
amount of the loan of US$1,250,000, as it was under the 2014 Loan Agreement , is
increased to US$1,400,000 (the “New Pr incipal Amount”) to include an advance made
by BGCG to the Company on November 28, 2016. The New Principal Amount and the
accrued interest are convertible into common shares of the Company at BGCG’s election.
The Amendment also reflects the share conversio n on the basis of one (1) new post -
consolidation common share for every 15 pre-consolidated common shares, conducted by
the Company on January 30, 2015, as previously disclosed in Company’s press release of
January 30, 2015. As a result of the share conver sion, the conversion price has been
adjusted from U $0.0125 per common share of the Company to US$0.1875 per common
share of the Company. The Amendment is effective as of November 30, 2016
The Company also announces that effective January 20, 2016 BGCG has elected to
convert the entire indebtedness under the 2014 Loan Agreement , as amended by the
Amendments (the “Indebtedness”) into the common shares of the Company (“ Shares”)
pursuant to the terms of the 2014 Loan Agreement , as amended by the Amendments (the
“Loan Conversion”). The board of directors of Liberty , having concluded that doing so
would be in the best interests of the Company, has approved the Loan Conversion and the
issuance thereunder of Shares to BGCG and parties named thereby as assignees of
portion of the Indebtedness. Under the terms of the Loan Conversion, the Indebtedness ,
being US$1,685,810.04 is to be converted into 8,990,986 Shares at the deemed price
US$0.1875 per Share.
The total of 4,490,986 of the 8,990,986 Shares issuable under t he terms of the Loan
Conversion shall be issued to BGCG , which prior to the Loan Conversion directly or
indirectly held 8,817,419 of the Shares, representing approximately 71.37% of the total
number of issued and outstanding Shares at that time. Following the issuance of Shares in
connection with the Loan Conversion, it is expected that BGCG will hold 13,308,405
Shares representing approximately 62.35% of 21,345,483 Shares that is expected to be
issued and outstanding immediately following the completion of the Loan Conversion.
As BGCG owns directly or indirectly, more than 10% of the issued and outstanding
Shares, BGCG is an “insider” of the Company, as such term is defined in applicable
securities legislation. Accordingly, in satisfaction of the requirem ents of the National
Instrument 62-104 - Take-Over Bids And Issuer Bids and National Instrument 62- 103 -
The Early Warning System and Related Take -Over Bid and Insider Reporting Issues , an
Early Warning report respecting the acquisitions of Shares by BGCG will be field upon
the completion of the Loan Conversion under the Company’s SEDAR Profile at
www.sedar.com. A copy of the early warning report to be filed by BGCG in connection
with the information in this press releas e may be obtained from Stacey Vogel at (954)
762-2223 extension 3.
For reason of owning directly or indirectly, more than 10% of the issued and outstanding
Shares, BGCG is also a “related party” and b oth the Amendment and the Loan
Conversion are “related party transactions” as these terms are defined in the Multilateral
Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (the
“MI 61-101”).
The Company relies on exemptions from formal valuation and minority approval
requirements under the MI 61-101, which would otherwise apply to the Amendment and
the Loan Conversion. The Company relies on the exemption from the formal valuation
requirement under subsection 5.5(b) of MI 61- 101, as the securities of the Company are
not liste d for trading on an enumerated exchange; the Company also relies on the
exemption from the formal valuation requirements under subsection 5.5(g) of MI 61- 101,
for reasons of financial hardship, as , according to the determination of all of the
independent directors of the Company, the Co mpany is in serious financial difficulty;
both the Amendment and the Loan Conversion are designed to improve the financial
position of the Corporation; neither the Amendment nor the Loan Conversion are subject
to a court orde r under a bankruptcy legislation; and all the independent directors of the
Company have determined that the terms of both the Amendment and the Loan
Conversion are reasonable for the Corporation. The Company relies on the exemption
from the minority approval requirements under subsection 5.7(e) of MI 61-101 for
reasons of financial hardship as described above . For the purposes of this approval, all
directors of Liberty, being Messrs. John Ryan, Bruce Reid and Howard M. Crosby are
viewed independent of BGCG.
About Liberty Silver Corp.
Liberty has the right to earn a joint venture interest in the 10,020- acre Trinity Silver
Project pursuant to the terms of an earn- in agreement with Renaissance Exploration Inc.
The Trinity Silver Project, located in Pershing County, Nevada, is Liberty ’s flagship
project.
Information about Liberty is available on its website, www.libertysilvercorp.com , or in
the SEDAR and EDGAR databases.
For additional information contact:
Howard M. Crosby, Chief Executive Officer
(509)526-3491
Cautionary Statements
Certain statements in this news release are forward -looking and involve a number of risks and uncertainties. Such
forward-looking statements are withi n the meaning of that term in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as well as within the meaning of the
phrase ‘forward- looking information’ in the Canadian Securities Administrators’ National Instrument 51 -102 –
Continuous Disclosure Obligations. The forward looking statements made herein are based on information currently
available to the Company and the Company provides no assurance that actual results wil l meet managem ent's
expectations or assumptions with respect to, among other things, the ability of Liberty to preserve its interes ts in the
Trinity Silver Project which is dependent on renegotiation of the Company’s obligation to complete a feasibility study,
the Company’s present and future financial condition, the Company’s ability to secure financing , and the state of
financial markets. Forward-looking statements include estimates and statements that describe the Company ’s future
plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or
result to occur. Forward- looking statements may be identified by such terms as “ believes”, “anticipates”, “expects”,
“estimates”, “may”, “could”, “would”, “will”, or “plan”, and may include statements regarding, among other things,
the status of the Trinity Silver Project earn-in agreement and the ability to renegotiate the obligation to complete a
feasibility study . Since forward-looking statements are based on assumptions and address future events and conditions,
by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results
of exploration, project development, and the Company’s financial condition and prospects, could differ materially from
those currently anticipated in such statements for many reasons such as: the inability of Liberty to renegotiate the
obligation to complete a feasibility study pursuant to the terms of the Trinity Silver Project earn -in agreement; the
ability of the Company to budget and manage its liquidity in light of the failure to obtain additional financing; changes
in general economic conditions and conditions in the financial markets; changes in demand and prices for precious
metals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments;
operational difficulties encountered in connection with the activities of the Company ; and other matters discussed in
this news releas e. This list is not exhaustive of the factors that may affect any of the Company ’s forward-looking
statements. These and other factors made in public disclosures and filings by the Company should be considered
carefully and readers should not place undue reliance on the Company ’s forward-looking statements. The Company
does not undertake to update any forward-looking statement that may be made from time to time by the Company or on
its behalf, except in accordance with applicable securities laws.