Patagonia Gold announces Conversion of Debt into Common Shares
Patagonia Gold announces Conversion of Debt into Common Shares
October 20, 2020 Vancouver, BC. Patagonia Gold Corp. (“Patagonia” or the “Company”)
(TSXV: PGDC) is pleased to announce that it has entered into an agreement with Tim Hunt
to convert an aggregate of US$10 million of outstanding debt into common shares of the
Company (the “Debt Conversion”) at a price per shar e that is equal to $0.30. This price
represents a premium of approximately 100% to the closing price of the common shares
on the TSX Venture Exchange (the “TSXV”) on October 19, 2020, prior to the parties
entering into such agreement.
The debt to be converted in connection with the Debt Conversion includes US$4,821,835
of principal and accrued interest owed to Mr. Hunt by the Company, and US$5,178,165 in
accounts payable owed to Mr. Hunt in respect of int erest, rent and administration
expenses accrued by the Company. Following the Debt Conversion, the balance of the
US$1,457,807 in accounts payable owed to Mr. Hunt a nd a related party to Mr. Hunt in
respect of interest, wages, rent and administration expenses is expected to be settled in
full by December 10, 2020 by a cash payment in the amount of US$720,397 plus 7%
accrued interest.
Christopher van Tienhoven, Chief Executive Officer states, “The Debt Conversion shows a
strong support for the long-term growth of the Company and is in line with the Company’s
mission of becoming an intermediate mining producer through the acquisition,
exploration and development of gold and silver projects in South America.”
Completion of the Debt Conversion is subject to app roval of the TSXV and closing is
expected to occur within five business days of the receipt of such approval. Upon
completion of the Debt Conversion, Tim Hunt, a director of Patagonia, is expected to own
or control 97,693,902 common shares in Patagonia, r epresenting a 27% interest in the
Company on an undiluted basis.
The Debt Conversion is a “related party transaction ” under Multilateral Instrument 61-
101 – Protection of Minority Security Holders in Special Transactions (“ MI 61-101 ”)
because Tim Hunt is a related party to Patagonia as a director of the Company and a
shareholder with an interest of more than 10%. Purs uant to Section 5.5(b) and 5.7(1)(c)
of MI 61-101, the Company is exempt from obtaining a formal valuation and approval of
the Company’s minority shareholders because the Com pany’s shares trade on the TSX
Venture Exchange and, pursuant to Section 5.5(e) of MI 61-101, the Debt Conversion is
supported by Carlos Miguens, the Company’s controlling shareholder.
The Company will file a material change report in r espect of the Debt Conversion.
However, the material change report will be filed l ess than 21 days prior to the closing,
which the Company deems reasonable in the circumstances.
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About Patagonia Gold
Patagonia Gold Corp. is a mining and development com pany listed on the TSX Venture
Exchange. The Company seeks to grow shareholder val ue through exploration and
development of gold and silver projects in the Pata gonia region of Argentina. The
Company is primarily focused on the Calcatreu project in Rio Negro and the development
of the Cap-Oeste underground project. Patagonia, i ndirectly through its subsidiaries or
under option agreements, has mineral rights to over 360 properties in several provinces
of Argentina and Chile and is one of the largest landholders in the province of Santa Cruz,
Argentina.
For more information, please contact:
Dean Stuart
T: 403 617 7609
Christopher van Tienhoven, Chief Executive Officer
Patagonia Gold Corp
T: +54 11 5278 6950
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements, including, but not limited
to, statements with respect to the Debt Conversion and repayment and settlement of
remaining debt owned to Mr. Hunt and his related parties. Wherever possible, words such
as “may”, “will”, “should”, “could”, “expect”, “pla n”, “intend”, “anticipate”, “believe”,
“estimate”, “predict” or “potential” or the negative or other variations of these words, or
similar words or phrases, have been used to identif y these forward-looking statements.
These statements reflect management’s current belie fs and are based on information
currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many
factors could cause actual results, performance or achievements to differ materially from
the results discussed or implied in the forward-loo king statements. These factors should
be considered carefully and readers should not plac e undue reliance on the forward-
looking statements. Although the forward-looking st atements contained in this news
release are based upon what management believes to be reasonable assumptions, the
Company cannot assure readers that actual results will be consistent with these forward-
looking statements. These forward- looking statemen ts are made as of the date of this
news release, and the Company assumes no obligation to update or revise them to reflect
new events or circumstances, except as required by law.
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.