Srg Mining Inc. and Sprott Private Resource Lending Ii (Collector), LP Announce USD$7.5M Convertible Senior Financing IN Support of Srg’S Bid FOR North American Lithium Inc.
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SRG Mining Inc.
1320 Graham, Suite 132
Ville Mont-Royal, Québec
H3P 3C8
PRESS RELEASE FOR IMMEDIATE RELEASE
SRG MINING INC. AND SPROTT PRIVATE RESOURCE LENDING II (COLLECTOR),
LP ANNOUNCE USD$7.5M CONVERTIBLE SENIOR FINANCING IN SUPPORT OF
SRG’s BID FOR NORTH AMERICAN LITHIUM INC.
Montreal, Quebec, January 26, 2021 - SRG Mining Inc. (TSXV: SRG) (“SRG” or the “Company”) is
pleased to announce t hat it has closed the first tranche (“Tranche 1”) of a private placement in the
form of a convertible debt financing for USD$7.5M (approximately CAD$9.53M) (the “Financing”)
with Sprott Private Resource Lending II (Collector), LP (“Sprott”). The Financing 1 is the first portion
of financial resources the Company will raise should it be successful in its bid to acquire the North
American Lithium Inc. (“NAL”) assets pursuant to the procedures of the Sale and Investor Solicitation
Process relating to NAL (“SISP.
The Company has been involved in the SISP since it was initially launched in October 2019. Since
then, the Company has conducted thorough due diligence including multiple site visits and
interviews with current and past management ; interviews with previous lenders, own ers and
suppliers of NAL ; a review of daily production reports ; and technical studies. Furthermore, the
Company conducted a review and remodelled the deposit ’s geological model using NAL’s 2019
drilling results as this had not previously been completed by NAL.
With this information in hand, the Company prepared a full diagnosis of the NAL project and drew
up an execution plan that involves recommissioning the NAL project as an integrated operation and
producing lithium chemicals within a 36 -month period. SRG intends to execute its plan while
minimizing its environmental footprint, maintaining worker health and safety as a core value,
respecting the interests of all stakeholders and ensuring long-term profitability of the project for its
shareholders. The detailed plan, along with our bid, was presented to the Raymond Chabot Inc. as
monitor pursuant to the SISP and the secured lenders including Contemporary Amperex Technology
(“CATL”) and Investissement Québec (“IQ”).
“After several months of due diligence and consideration, we have submitted a bid and an action plan
to the Monitor and the secured lenders, including the Government of Québec and IQ, which we believe
will maximize stakeholder value in this project,” said Benoit La Salle, Executive Chairman of SRG.
“Our offer provides secured lenders with meaningful repayment of their debts and gives IQ
meaningful participation in the project via SRG shares should the project be successful. SRG is already
in the battery mat erials space with a shovel-ready graphite project, and the addition of NAL would
further strengthen our portfolio. Our team is made up of Québec-based mining specialists who have
built their reputation on turning around distressed mining operations worldwide. Our bid, which is
made by Quebecers for a Q uébec project , maximizes the lithium resource by providing for a
conversion plant on site from day one of the restart.”
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Convertible Senior Notes Debt Financing
Tranche 1
Tranche 1, which closed and was funded on January 25, 2021, comprised USD$800,000 and includes
a subscription for 109, 900 common shares of the Company (the “ Incentive Shares”). Incentive
Shares will be issued at a deemed price equal to a 10% discount to the January 22, 2021 closing share
price, being $0.58 per share.
Tranche 1 will be convertible into common shares of the Company, at the discretion of Sprott, at a
conversion price equal to C$0.70 per share (“Tranche 1 Conversion Price”).
Tranche 2
Tranche 2 repres ents USD$6,700,000 and shall be advanced upon certain conditions, including,
amongst others, the successful closing of the equity raise contemplated for the acquisition of the NAL
assets (the “Equity Financing”) should the Company be the winning bidder of the SISP for NAL (the
“Closing Date”).
Tranche 2 will be convertible into common shares of the Company, at the discretion of Sprott, and
upon regulatory approval, at a conversion price equal to the lesser of (i) C$0.74 per share or (ii) the
Equity Financing price (“Tranche 2 Conversion Price”).
Concurrently, the Company will issue Sprott 5,000,000 warrants (each a “Warrant”), whereby each
Warrant shall entitle the holder to purchase one common share and shall co ntain customary anti -
dilution clauses. Warrants will be fully transferable and will have a term of 3 years from their date of
issue and an exercise price equal to a 15% premium to the lesser of (a)the 20-day volume weighted
average price of the common shar es of the Company prior to the Closing Date and (b) the price at
which common shares of the Company are issues as part of the Equity Financing price (the “Exercise
Price”).
The interest rate of the convertible senior note under the Financing is 8.00% per annum, payable
semi-annually in arrears on the last day of June and December in each year, commencing June 30,
2021 computed on the basis of a 360-day year composed of twelve 30-day months.
The Financing is subject to certain conditions including, but not limited to, the receipt of all necessary
approvals, including the final approval of the TSX Venture Exchange. All securities issuable in
connection with the Financing are subject to a four -month hold period from the date of issuance in
accordance with applicable Canadian securities laws.
Net proceeds from the Private Placement will be used to provide the necessary funds to complete
and pursue the NAL bid.
About SRG Mining
SRG Mining is a Canadian -based mining company focused on developin g the Lola graphite deposit
located in the Republic of Guinea, West Africa. SRG is committed to operating in a socially,
environmentally, and ethically responsible manner.
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For additional information, please visit SRG’s website at www.srgmining.com.
About Sprott
Sprott is a global asset manager providing investors with access to highly -differentiated precious metals
strategies. Sprott’s specialized investment products include innovative physical bullion trusts, manage d
equities, mining ETFs, as well as private equity and debt strategies. We also partner with natural resource
companies to help meet their capital needs through our brokerage and resource lending activities. Sprott
is based in Toronto and has offices in Ne w York, San Diego and Vancouver. Sprott’s common shares are
listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol “SII”.
Sprott today serves over 200,000 global clients and has approximately USD$16.3 billion in assets under
management.
Contact :
Benoit La Salle, FCPA FCA
Email: [email protected]
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 release.
Forward-Looking Statements
This press release contains "forward-looking information" within the meaning of Canadian securities
legislation. All information contained herein that is not c learly historical in nature may constitute
forward-looking information. Generally, such forward -looking information can be identified by the
use of forward -looking terminology such as “firm”, “anticipated”, “plan”, “intends”, “minimizing”
maintaining”, “en suring”, “potential”, “will”, “continue”, “demonstrate”, “deliver”, “believe”, or
variations of such words and phrases or state that certain actions, events or results "may", "could",
"would" or "might". Forward -looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of activity, performance or
achievements of the Company to be materially different from those expressed or implied by such
forward-looking information, including but no t limited to: (i) volatile stock price; (ii) the general
global markets and economic conditions; (iii) the possibility of write -downs and impairments; (iv)
the risk associated with exploration, development and operations of mineral deposits and mine plans
for the Company’s mining operations; (v) the risk associated with establishing title to mineral
properties and assets including permitting, development, operations and production from the
Company’s operations being consistent with expectations and projecti ons; (vi) fluctuations in
commodity prices, finding offtake takers and potential clients or enforcing such agreements against
same and other risks and factors described or referred to in the section entitled "Risk Factors" in the
MD&A of the Company and which is available at www.sedar.com, all of which should be reviewed in
conjunction with the information found in this news release.
Although the Company has attempted to identify important factors that could cause actual results to
differ materially from those contained in the forward-looking information, there may be other factors
that cause results not to be as anticipated, estimated or intended. There can be no assurance that
such forward-looking information will prove to be accurate, as actual results and future events could
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differ materially from those anticipated in such forward-looking information. Such forward-looking
information has been provided for the purpose of assisting investors in understanding the Company's
business, operations and exploratio n plans and may not be appropriate for other purposes.
Accordingly, readers should not place undue reliance on forward -looking information. Forward -
looking information is given as of the date of this press release, and the Company does not undertake
to update such forward-looking information except in accordance with applicable securities laws.