CMX Delays AGM and Considers Alternatives
CMX Delays AGM and Considers Alternatives
Toronto, ON. August 17, 2018 . Chilean Metals Inc. (“Chilean Metals,” “CMX” or the
“Company”)(TSX.V:CMX, OTCQB: CMETF, SS E:CMX, MILA:CMX, FRA: IVV1, BER :
IVV1). Since its news release of July 9, 2018, the Company has been trying to obtain TSXV
approval for the previous placement and approval fo r a further tranche of the private placement.
The TSXV’s delay in approving the Company’s present private placement financing will require
the Company to obtain a loan, on steep terms, to cover working capital expenses. The loan is
still being negotiated and subj ect to CMX board approval a nd would be provided by CMX’s
largest shareholder. It is likely the bridge loan amount would be $250,000. Terms would be a fee
of 6% and Interest of 14% with interest prepaid for the one y ear term of the loan. The loan
would be secured by a first charge on CMX’s assets.
The TSXV’s proposed alternatives for private placement approval appear out of the norm and
are not proportional. We have had discussions with the Exchange on possible remedies and have
arrived at no solution. There is no guarantee we w ill arrive at a solution with the TSXV or that
the solution will not be materially worse for ex isting shareholders than the proposals for the
current equity financing that is before the TSXV.
In discussions with the Exchange, their staffs have discussed shareholde r Chris Berlet and his
requisition for the Company to hold an annual meeting on behalf of himself and Cogonov. These
actions were initially made and publicized when he had no standing to do so, as he was not a
registered shareholder of the Company.
CMX is unaware of any proxy battle but has be en advised by Mr. Berlet that he and “Cogonov
and Friendlies” are planning to vote in a ne w board at our upcoming annual meeting. They
expressed to us that they intend to use an exem ption allowing them to solicit up to 15 persons in
this attempted Board takeover, w ithout disclosure or producing th eir own circular. They offered
to leave current management in charge of the Nova Scotia assets if we would agree to some very
onerous terms favoring Mr. Berlet and his associates, which we did not view in the best interests
of the Company. We rejected this proposal. This lack of transparency by Mr. Berlet and those
acting in concert with him is not fair to shareholders.
Cogonov Inc., according to current public record, shows as an o fficer, a former CMX executive
Gary Lohman, as president of Cogonov. Mr. Lohm an resigned from management of the CMX in
March, along with Patrick Cruickshank (past CEO of Cogonov). Following their management
resignations, the Company corrected in our MD&A this (former) disclo sure which had been
understood by the Board to be royalties in favo ur of parties affiliated with Cogonov including
specifically Mr. Berlet.
“Certain claims are subject to a 3% NSR as well as under the Nova Scotia Mineral Resource Act
there is a royalty, payable to the crown, of 2% of the net revenue or 15% of all net income,
whichever is greater, derived from the sale of metals produced from a mining lease.”
Subsequent to their resignation the disclosure was updated.
“Under the Nova Scotia Mineral Resource Act there is a royalty, payable to the crown, of 2% of
the net revenue or 15% of all net income, whicheve r is greater, derived from the sale of metals
produced from a mining lease.”
There were never any recorded royalties wh en the Company purchased the Nova Scotia
properties and none granted contractually by the Co mpany in favour of parties affiliated with
Cogonov. When CMX acquired the Nova Scotia Pr operties from Cogonov there was a specific
contractual provision representi ng that the properties were une ncumbered. No royalties existed
on title or a search of the Department of Natural Resources.
“The thought of having our Company managed by anyone who would support phantom royalties
doesn’t sound like a good deal for any of our shareholders. It is certainly not what we expect the
current round of investors contemplated when they invested. They had invested in a clear vision
of how to grow value in our Nova Scotia Properties as developed and guided by Mick Sharry our
new President and COO. They invested in our Chilean Assets which focused on the preservation
of the 3% Royalty we have with Teck on our fo rmer Copaquire property which is adjacent both
Teck’s QueBrada Blanca 1 (QB1) mine and the recently approved QB2 mine. It is unfortunate in
the face of a encouraging news operationally that certain opportunistic shareholders are trying to
take advantage of the Company. This bridge loan is being provided by our largest shareholder as
debt as in the current situati on he is not comfortable providing equity” commented Chilean CEO
Terry Lynch.
The Company is considering all alternatives available to it, and accordingly must postpone its
September 6, 2018 AGM beyond the current date. Given the inability to complete its financing
and ongoing discussions with the Exchange, the Company was not able to finalize its
information circular in a timely fashion for ma iling. The Company will update shareholders of
the new meeting date as soon as it is able to do so.
About Chilean Metals,
www.chileanmetals.com/
Chilean Metals Inc. is a Canadian Junior Exploration Company focusing on high potential
Copper Gold prospects in Chile & Canada.
Chilean Metals Inc is 100% ow ner of five properties comprisi ng over 50,000 acres strategically
located in the prolific IOCG (“Iron oxide-copper-gold”) belt of northern Chile. It also owns a 3%
NSR royalty interest on any future production from the Copaquire Cu-Mo deposit, recently sold
to a subsidiary of Teck Resources Inc. (“Teck”). Under the terms of the sale agreement, Teck has
the right to acquire one third of the 3% NSR fo r $3 million dollars at any time. The Copaquire
property borders Teck’s producing Quebrada Blanca copper mine in Chile’s First Region.
Chilean Metals Inc is the 100% owner of five Copper Gold Cobalt exploration properties in
Nova Scotia on the western flank of the Cobequ id-Chedabucto Fault Zone (CCFZ); Fox River,
Parrsboro, Lynn, Economy and Bass River Nort h respectively. It has also optioned two
additional projects Trident at Bass River and Economy East. Chilean Metals is exploring,
analyzing and drilling these properties in the summer of 2018.
ON BEHALF OF THE BOARD OF DIRECTORS OF
Chilean Metals Inc.
“Terry Lynch”
Terry Lynch, CEO
Contact: [email protected]
The Qualified Person for Chilean Metals Inc., as defined by National Instrument 43-101, is Mick
Sharry, M.Sc. Consultant
Forward-looking Statements: This news release may contain certain statements that may be
deemed "forward-looking statements". All statements in this release, other than statements of
historical fact, that address events or developments that CMX expects to occur, are forward
looking statements. Forward-looking statements are statements that are not historical facts and
are generally, but not always, identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "pot ential" and similar expressions, or that events
or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements in
this document include statements regarding curre nt and future exploration programs, activities
and results. Although CMX believes the expecta tions expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not guarantees of future
performance and actual results may differ materia lly from those in forward-looking statements.
Factors that could cause the actual results to differ materially from those in forward-looking
statements include market prices, exploitation an d exploration success, con tinued availability of
capital and financing, inability to obtain requ ired regulatory or govern mental approvals and
general economic, market or business conditi ons. Investors are cautioned that any such
statements are not guarantees of future perfor mance and actual results or developments may
differ materially from those projected in the forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provid er (as that term is defined
in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy
of this release.