P2 Gold Closes Agreement to Settle Outstanding Debt and Convertible Debenture Unit Offering
P2 Gold Closes Agreement to Settle
Outstanding Debt and Convertible Debenture
Unit Offering
VANCOUVER, BC
,
March 5, 2024
/CNW/ -
P2 Gold Inc.
("P2" or the "Company") (TSXV: PGLD)
(OTCQB: PGLDF) reports that it has closed the agreement to settle the outstanding debt related to
the acquisition of the Gabbs Project and the first tranche (the "First Tranche") of the concurrent non-
brokered private placement of convertible debenture units (the "Units") for
$1,362,000
(the
"Offering").
Debt Settlement
In settling the debt, P2 entered into a termination agreement (the "Termination Agreement") with
Waterton Nevada Splitter, LLC ("Splitter"), an affiliate of Waterton Precious Metals Fund II Cayman,
LP pursuant to which P2 will issue or pay to Splitter (a)
US$1 million
(paid) and 5,231,869 common
shares (issued) in the capital of the Company ("Shares") at closing at a deemed price of
C$0.07
per
Share, (b)
US$125,000
on or before
January 31, 2025
, and (c) US$125,000 on or before January
31, 2026.
Splitter currently has beneficial ownership of, and control or direction over, 23,552,403 Shares of the
Company, representing approximately 19.9% of the issued and outstanding Shares.
Splitter is a "related party" of the Company. The issuance of the Shares and cash payments to
Splitter described above is considered a related party transaction subject to Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special Transactions. The Company relied on
exemptions from the formal valuation and minority shareholder approval requirements provided under
sections 5.5(g) and 5.7(1)(e) of Multilateral Instrument 61-101 on the basis that the debt settlement
transaction is intended to improve the Company's financial position.
In connection with the acquisition of the Gabbs Project, P2 granted to Waterton a 2% net smelter
returns royalty (the "Royalty") on production from the Gabbs Project, of which one percent may be
repurchased at any time by P2 Gold for
US$1.5 million
and the remaining one percent of which may
be repurchased for
US$5 million
. Waterton assigned its rights to the Royalty to Franco-Nevada
Corporation in June of 2023.
The Offering
The Company expects to issue up to 1,700 Units at a price of
C$1,000
per Unit. Each Unit will
consist of one convertible debenture (a "Convertible Debenture") with a principal amount of
$1,000
and 12,500 Share purchase warrants (the "Warrants").
The Convertible Debentures will bear interest at a rate of 7.5%, payable semi-annually on the last
day of June and December of each year, commencing on
June 30, 2024
. Interest will be paid in
Shares based on the greater of the Market Price (as defined in the policies of the Exchange) and
15-day volume weighted average price ("VWAP") of the Shares on the Exchange or cash, at the
Company's election, subject to Exchange approval. The Convertible Debentures will have
approximately a two-year term (the "Term"), with the principal amount being due to be repaid in full
by the Company on
January 31, 2026
(the "Maturity Date"). At any time during the Term, the
Company will have the option to extend the Term by up to one additional year on payment of an
extension fee to the holders of the Convertible Debentures (the "Holders") in the amount of six
month's interest payable in Shares based on the greater of the Market Price and the 15-day VWAP
or cash, at the Company's election, subject to Exchange approval. The Convertible Debentures are
unsecured.
Under the terms of the Offering, at any time during the Term, a Holder may elect to convert the
outstanding net principal amount, or any portion thereof, into common shares in the capital of the
Company ("Shares") at a conversion price of
C$0.07
per Share up to
January 31, 2025
and
$0.10
per Share from
February 1, 2025
up to
January 31, 2026
(the "Conversion Price"). In the event the
Company announces a business combination and the 15-day VWAP of the Shares on the Exchange
is greater than
$0.07
, the Company will have the right to require the Holders to convert the
outstanding net principal amount into Units at the Conversion Price by giving notice to the Holders by
news release or other form of notice permitted by the Convertible Debentures that the Convertible
Debentures will convert on the closing of the business combination.
Each Warrant shall entitle the holder thereof to acquire one Share at an exercise price of
$0.15
, for
a period of 24 months (the "Expiry Time"), provided that, if after the later of four months from the
date of issue and conversion, the closing price of the Shares on the Exchange is equal to or greater
than
$0.30
for a period of 10 consecutive trading days at any time prior to the Expiry Time, the
Company will have the right to accelerate the Expiry Time by giving notice to the holders of the
Warrants by news release or other form of notice permitted by the certificate representing the
Warrants that the Warrants will expire at
4:30 p.m.
(
Vancouver
time) on a date that is not less than
15 days from the date notice is given.
The majority of the proceeds of the Offering will be used to fund obligations under the Termination
Agreement. The Offering will close on completion of documentation and is conditional upon receipt
of all necessary regulatory approvals, including the approval of the Exchange.
The Offering will be offered to accredited investors in all Provinces of
Canada
pursuant to applicable
securities laws. The securities issued pursuant to the First Tranche will be subject to a four-month
hold period expiring on
July 4, 2024
. In connection with the First Tranche, the Company paid finder's
fees of an aggregate of
$59,640
and issued an aggregate of 745,500 warrants to an arm's length
finder, representing 6% of the proceeds raised from subscriptions by, and 6% of the Units issued to,
certain placees.
The securities to be offered in the Offering have not been, and will not be, registered under the U.S.
Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and
may not be offered or sold in
the United States
or to, or for the account or benefit of,
United States
persons absent registration or any applicable exemption from the registration requirements of the
U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute
an offer to sell or the solicitation of an offer to buy securities in
the United States
, nor shall there be
any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be
unlawful.
About P2 Gold Inc.
P2 is a mineral exploration and development company focused on advancing precious metals and
copper discoveries and acquisitions in the western
United States
and
British Columbia
.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Information
This press release contains "forward-looking information" within the meaning of applicable securities
laws that is intended to be covered by the safe harbours created by those laws. "Forward-looking
information" includes statements that use forward-looking terminology such as "may", "will", "expect",
"anticipate", "believe", "continue", "potential" or the negative thereof or other variations thereof or
comparable terminology. Such forward-looking information includes, without limitation, information
with respect to the Company's expectations, strategies and plans for exploration properties including
the Company's planned expenditures and exploration activities at the Gabbs Project, the significance
of the removal of the debt overhang as it relates to the development of Gabbs, the completion of the
Offering, Exchange approval of the Offering and the Termination Agreement, and the use of
proceeds from the Offering.
Forward-looking information is not a guarantee of future performance and is based upon a number
of estimates and assumptions of management at the date the statements are made, including
without limitation, that the Company will be able to use the proceeds from the Offering as
anticipated, that the Company will receive Exchange approval for the Offering and Termination
Agreement, that the settlement of outstanding debt will allow the Company to optimize mine
development at Gabbs as well as the other assumptions disclosed in this news release.
Furthermore, such forward-looking information involves a variety of known and unknown risks,
uncertainties and other factors which may cause the actual plans, intentions, activities, results,
performance or achievements of the Company to be materially different from any future plans,
intentions, activities, results, performance or achievements expressed or implied by such forward-
looking information, including without limitation, the inability to use the proceeds from the Offering as
expected, that the Company will not receive Exchange approval for the Termination Agreement or
the Offering, that the settlement of outstanding debt will not allow for the optimization of mine
development at Gabbs and risks associated with mineral exploration, including the risk that actual
results and timing of exploration and development will be different from those expected by
management. See "Risk Factors" in the Company's annual information form dated
March 16, 2023
filed on SEDAR+ at www.sedarplus.ca for a discussion of these risks.
The Company cautions that 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
information. Accordingly, investors should not place undue reliance on forward-looking information.
Except as required by law, the Company does not assume any obligation to release publicly any
revisions to forward-looking information contained in this press release to reflect events or
circumstances after the date hereof.
SOURCE
P2 Gold Inc.
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%SEDAR: 00045664E
For further information:
Joseph Ovsenek, President & CEO, (778) 731-1055; Michelle Romero,
Executive Vice President, (778) 731-1060; P2 Gold Inc., Suite 789, 999 West Hastings Street,
Vancouver, BC, V6C 2W2, [email protected]; (SEDAR filings: P2 Gold Inc.)
CO: P2 Gold Inc.
CNW 16:22e 05-MAR-24