KORE Mining Announces Rights Offering and Stand-BY Commitment
KORE MINING ANNOUNCES RIGHTS
OFFERING AND STAND-BY COMMITMENT
/NOT FOR DISTRIBUTION TO
UNITED STATES
NEWSWIRE SERVICES OR FOR
DISSEMINATION INTO
THE UNITED STATES
./
Proceeds Provide Working Capital and Sustains Optionality for KORE's Gold Projects
VANCOUVER, BC
,
Oct. 12, 2022
/CNW/ - KORE Mining Ltd. ("
KORE Mining
") announces that it
will be conducting a rights offering to holders of its common shares ("
Common Shares
") at the
close of business on the record date of
October 20, 2022
(the "
Record Date
"). The offering will be
to raise gross proceeds of
CDN$864,970.01
from issuing up to 86,497,010 Common Shares (the
"
Rights Offering
").
Shares pursuant to the Rights Offering are being issued at the minimum possible price (
CDN$0.01
per share), a steep discount from the current market price. Management does not consider it to be
unfairly dilutive to shareholders however, as all shareholders can maintain their interest at low cost
and can potentially increase their interest using the "Additional Subscription Privilege". The Rights
Offering is designed to confer a benefit on shareholders willing to participate and, notwithstanding
that several of KORE Mining's Directors have agreed to guarantee or "backstop" approximately 65%
of Rights Offering, it is management's hope that shareholders choose to maintain and/or increase
their interests, leading to a more incentivized and motivated shareholder base. The Rights Offering
recapitalizes the Company and enables it to maintain its mining interests at a much reduced
overhead (see
June 17, 2022
press release
) during challenging times in both the gold exploration
sector and in the financial markets.
James Hynes
, KORE's Executive Chairman and CEO commented, "
Capital markets for small-cap
gold equities have been very weak in 2022 and the Company has faced various operational
challenges. The Board continues to believe in the value creation potential of KORE's gold projects
and is guaranteeing a rights offering that provides an opportunity for shareholders to maintain or
increase their position at an attractive price."
Details of the Rights Offering
Rights will be offered on the basis of three quarters of one (3/4) right (the "
Rights
") for each
Common Share held at the Record Date. One (1) Right will entitle the holder to subscribe for one
Common Share upon payment of the subscription price of
CDN$0.01
per Common Share.
The Rights will not be listed for trading on any securities exchange. All Rights will expire at
2:00 pm
(
Vancouver
time) /
5:00 p.m.
(
Toronto
time) on
November 15, 2022
(the "
Expiry Time
"), after which
time unexercised Rights will be void and of no value. Shareholders who fully exercise their Rights
will be entitled to subscribe for additional Common Shares (the "
Additional Subscription
Privilege
"), on a pro-rata basis, if available as a result of unexercised rights prior to the Expiry Time,
subject to certain limitations set out in KORE Mining's rights offering circular dated
October 12, 2022
(the "
Rights Offering Circular
").
The Rights Offering will be conducted in all provinces and territories of
Canada
. Certain holders of
Common Shares in jurisdictions outside of Canada may be able to participate in the Rights Offering
where they can establish that the transaction is exempt under applicable legislation. If you are a
holder of Common Shares and reside outside of
Canada
, please review the Notice of Rights
Offering, Rights Offering Circular and Notice to Ineligible Shareholders to determine your eligibility
and the process and timing requirements to receive and, or, exercise your Rights. KORE Mining
requests any ineligible shareholder interested in exercising their Rights to contact the Company at
their earliest convenience after the Rights are mailed out, which is expected to be on or after
October 25, 2022
.
Details of the Rights Offering will be set out in the Notice of Rights Offering and the Rights Offering
Circular which will be available under KORE Mining's profile at
www.sedar.com
and on the
Company's website at
www.koremining.com
. The Notice of Rights Offering will be mailed to each
eligible shareholder of KORE Mining as at the Record Date. Following the mailing of the Notice of
Rights Offering, an exercise form enclosed with a statement issued under Computershare Investor
Services Inc.'s direct registration system (the "
Rights Statement
") will be mailed to each eligible
registered shareholder of KORE Mining as at the Record Date. Registered shareholders who wish
to exercise their Rights must forward the completed Rights Statement, together with the applicable
funds, to the rights agent, Computershare Investor Services Inc., on or before the Expiry Time.
Shareholders who own their Common Shares through an intermediary, such as a bank, trust
company, securities dealer or broker, will receiver materials and instructions through their
intermediary.
Neither the Rights being offered or the Common Shares issuable upon exercise of the Rights have
been or will be registered under the
United States
Securities Act of 1933
, as amended, and may not
be exercised, offered or sold, as applicable, in the United States absent registration or an applicable
exemption from the registration requirements. This news release shall not constitute an offer to sell
or the solicitation of an offer to buy the securities of KORE Mining. There shall be no offer or sale of
these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to
the registration or qualification of such securities under the laws of any such jurisdiction.
KORE Mining's directors and executive officers who own Common Shares, as well as other insiders,
are permitted, but not required except for KORE Directors
James Hynes
,
Jay Sujir
,
Harry Pokrandt
and
Don MacDonald
, pursuant to the Stand-By Agreement discussed below, to participate in the
Rights Offering on the same terms and conditions applicable to all shareholders.
Stand-By Commitment
Several of KORE Mining's Directors have agreed to backstop up to
$557,896.83
, or approximately
65%, of the proceeds to be raised pursuant to the Rights Offering by providing a stand-by
commitment. KORE Mining has entered into stand-by agreements (the "
Stand-by Agreement
")
with four directors (the "
Stand-by Guarantors
"), including a company owned and controlled by
James Hynes
, the Executive Chairman and CEO of KORE Mining.
Under its Stand-by Agreement,
1081646 B
.C. Ltd. ("
HynesCo
"), a company owned and controlled
by
James Hynes
, is guaranteeing the maximum allowable amount of the Rights Offering, being
CDN$357,896.83
, before triggering the TSX Venture Exchange's costly and time consuming
requirements for obtaining shareholder approval for the possible creation of a new holder of 20% of
KORE Mining's Common Shares.
In consideration for the stand-by commitment, the Stand-by Guarantors will receive 5-year warrants
("
Warrants
") to purchase 20% of the Common Shares the Stand-by Guarantors have agreed to
acquire under the stand-by commitment, at an exercise price equal to
$0.105
per Common Share.
In the event a Stand-by Guarantor holds 20% or more of the issued and outstanding KORE Shares
following the completion of the Rights Offering, as a result of those KORE Shares acquired pursuant
to their Stand-by Commitment, the Warrants issued to such Stand-by Guarantor will not be
exercisable without KORE obtaining disinterested shareholder approval.
Pursuant to each Stand-by Agreement, the Stand-by Guarantors will exercise all of their respective
Rights and will exercise each of their Basic Subscription Privilege and Additional Subscription
Privilege so that the Stand-by Guarantors will collectively purchase up to approximately 65% of the
Common Shares under the Rights Offering. Each Stand-by Agreement contains representations,
warranties, covenants and other provisions typical of a transaction of this nature, including the right
not to purchase Common Shares as contemplated by the Stand-by Agreement if there is a breach
by KORE Mining of its representations or if there is a material adverse change in the business of
KORE Mining.
Ineligible Holders
Shareholders who are resident in a jurisdiction outside of
Canada
(the "
Ineligible Holders
"), may be
able to participate in the Rights Offering under certain exemptions. The Company will not issue or
forward rights certificates to Ineligible Holders, however, a letter will be sent to them which will:
describe the conditions that must be met, and the procedures that must be followed in order for
an Ineligible Holder to participate in the Rights Offering; and
Advise them that their Rights will be held by Computershare who will, prior to the Expiry Time,
attempt to sell any unexercised rights of Ineligible Holders on such dates and at such prices as
it determines in its sole discretion.
Ineligible Holders who wish to participate in the Rights Offering and are unsure of whether they meet
the required exemptions are encouraged to contact the Computershare, the Company, or their own
legal advisors directly.
Early Warning Disclosure
HynesCo, a Stand-by Guarantor, is providing the following additional information pursuant to the
early warning requirements of applicable Canadian securities laws:
Prior to entering into the Stand-by Agreement, HynesCo beneficially owned 2,833,624 Common
Shares representing approximately 2.46% of the issued and outstanding Common Shares on a non-
diluted and partially diluted basis. Assuming the full utilization of the Stand-by Commitment provided
by HynesCo to KORE Mining, HynesCo would acquire 35,789,683 Common Shares and 7,157,937
Warrants, resulting in an increase in HynesCo's shareholding percentage of approximately 16.11%
on a non-diluted basis and 18.90% on a partially diluted basis, for total holdings of 18.56% on a non-
diluted basis and 21.35% on a partially diluted basis.
The securities above are held by HynesCo for investment purposes. Mr. Hynes has a long-term view
of the investment and may acquire additional securities of KORE Mining including on the open
market or through private acquisitions or sell securities of KORE Mining including on the open market
or through private dispositions in the future depending on market conditions, reformulation of plans
and/or other factors that Mr. Hynes considers relevant from time to time.
A copy of HynesCo's early warning report will appear on KORE Mining's profile on SEDAR and may
also be obtained by contacting Mr.
James Hynes
at the number set out below.
About KORE Mining
KORE Mining is focused on responsibly creating value from its portfolio of gold assets in
California,
USA
. The Company is advancing the Imperial project towards development while continuing to
explore across both district-scale gold assets.
On behalf of KORE Mining Corp
"
James Hynes
"
Executive Chairman
(888) 407-5450
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 Regarding Forward-Looking Information
This press release contains forward-looking information based on current expectations, including
but not limited to KORE Mining's expectations in connection with the Rights Offering and Stand-by
Agreements, including the use of proceeds and events which are proposed to occur on closing.
Forward-looking information is often, but not always, identified by the use of the words
"contemplate", "estimate", "expect" and "anticipate" and statements that an event or result "may'',
"will", "should", "could" or "might" occur and any similar expressions or negative variations thereof.
In providing forward-looking information in this press release, KORE Mining has made numerous
assumptions regarding the Rights Offering and Stand-by Agreements, which KORE Mining
believes to be reasonable, including assumptions relating to: (i) the satisfaction or waiver of all
conditions to the completion of the Rights Offering and the Stand-by Agreement; and (ii) the
outcome of the Rights Offering and related transactions, including the expected use of proceeds.
Forward-looking information entails various risks and uncertainties however that could cause
actual results to differ materially from those reflected in the forward-looking information. Specific
risks that could cause actual results to differ materially from those anticipated or disclosed in this
press release include, but are not limited to: (i) the dilution that will be experienced by
shareholders who do not exercise their Rights; (ii) failure to satisfy the conditions to complete the
Rights Offering and the commitments, including failure to receive required approvals, including the
occurrence of any event, change or other circumstance that could give rise to the termination of the
Stand-by Agreements (iii) the delay of completion or failure to complete the Rights Offering for
any other reason; (iv) no assurance as to the ability to trade of any Rights; (v) the exercise of the
Rights of a shareholder being irrevocable; (vi) the exercise price may not indicate the value of the
Common Shares; (vii) failure of a shareholder to properly subscribe for shares may result in a
non-exercise; (viii) the use of funds may differ from that set out by KORE Mining; and * if the
Rights Offering is terminated, shareholders will not receive any interest on funds forwarded with
their subscriptions. In addition to the above summary, additional risks and uncertainties inherent to
the Company and the Rights Offering are described in the "Risk Factors" section of the Rights
Offering Circular dated
October 12, 2022
available on
www.sedar.com
. Forward-looking
information are not guarantees of future performance, and management's assumptions upon which
such forward-looking information are based may prove to be incorrect.
Accordingly, there can be no assurance that actual events or results will be consistent with the
forward-looking information disclosed herein. In light of the significant uncertainties inherent in
forward-looking information, any such forward-looking information should not be regarded as
representations by us that our objectives or plans relating to the rights offering or standby
commitment or otherwise will be achieved. Investors are cautioned not to place undue reliance on
any forward-looking information contained herein and that such forward-looking information are
provided solely for the purpose of providing information about our current expectations and plans
relating to the future. Readers are cautioned that such information may not be appropriate for
other purposes. In addition, forward-looking information relates to the date on which they are
made.
KORE Mining disclaims any intention or obligation to update or revise any forward-looking
information contained in this press release, whether as a result of new information, future events
or otherwise, except to the extent required by law. There can be no assurance that forward-looking
information 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 information.
SOURCE
Kore Mining
View original content:
http://www.newswire.ca/en/releases/archive/October2022/12/c1762.html
%SEDAR: 00005837E
For further information:
on Imperial and KORE can be found on the Company's website at
www.koremining.com or by contacting us as [email protected] or by telephone at (888) 407-
5450.
CO: Kore Mining
CNW 07:30e 12-OCT-22