Platinum Group Metals Announces US$10.4 Million Bought Deal Financing, US$9.2 and US$10 Million Private Placements of Common Shares and Entry into a Payout Agreement and New US$20 Million Credit Facility
News Release August 15, 2019
PLATINUM GROUP METALS ANNOUNCES US$10.4 MILLION
BOUGHT DEAL FINANCING, US$9.2 AND US$10 MILLION PRIVATE
PLACEMENTS OF COMMON SHARES AND ENTRY INTO A PAYOUT
AGREEMENT AND NEW US$20 MILLION CREDIT FACILITY
Vancouver, B.C. ( August 15, 2019) – Platinum Group Metals Ltd. (PTM-TSX, PLG-
NYSE.American) (the “Company” or “Platinum Group Metals”) announces that it has
entered into an agreement with BMO Capital Markets (“BMO”) under which BMO has
agreed to buy on a bought deal basis in the United States 8,326,957 common shares
of the Company (the “Offered Shares”), at a price of US$ 1.25 per Offered Share for
gross proceeds of approximately US$ 10,408,696 million (the “ Public Offering”). The
Company has granted BMO an option to purchase additional common shares of the
Company (the “Option Shares”) equal to u p to 15% of the aggregate number of
Offered Shares to be sold in the Public Offering on the same terms and conditions.
The Public Offering is being conducted pursuant to the Company's effective shelf
registration statement on Form F -3 (the “Registration St atement”) filed with the U.S.
Securities and Exchange Commission (the "SEC"). The Registration Statement and
the prospectus supplement relating to the Public Offering do not qualify in any of the
provinces or territories of Canada the distribution of the Offered Shares or the Option
Shares.
No Offered Shares or Option Shares may be offered or sold, directly or indirectly, in
Canada or to any resident in Canada.
In addition, the Company has entered into a series of agreements, through which,
together with the proceeds from the Public Offering, it expects to repay its secured
loan facility (the “LMM Facility”) with Liberty Metals & Mining Holdings, LLC (“LMM”) in
full, including: a new credit agreement with Sprott Private Resource Lending II
(Collector), LP (“Sprott”) and the other lenders party thereto (the “Sprott Lenders”)
pursuant to which the Sprott Lenders will provide a new senior secured credit facility
to the Company (the “New Credit Facility”); a subscription agreement (the “Deepkloof
Subscription Agreement”) with Deepkloof Limited (“Deepkloof”), a subsidiary of
Hosken Consolidated Investments Limited, with respect to a private placement of
common shares of the Company (the “Deepkloof Private Placement”); a payout
agreement (the “Payout Agreement”) with LMM; and subscription agreement
(the “LMM Subscription Agreement”) with LMM with respect to a private placement of
common shares of the Company (the “LMM Private Placement” and, together with the
Deepkloof Private Placement, the “Private Placements”), each as described below.
838 – 1100 Melville Street
Vancouver, BC V6E 4A6
P: 604-899-5450
F: 604-484-4710
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R. Michael Jones CEO of Platinum Group Metals said “We are very pleased to enter
into these agreements with the support Hosken Consolidated and Liberty as
shareholders. When closed, the transaction will significantly reduce and defer secured
debt, as we continue our work on the Waterberg Project.”
The Company intends to use the net proceeds of the Public Offering, together with
the proceeds of the New Credit Facility and the Private Placements: (i) to repay in full
the balance of the LMM Facility pursuant to the Payout Agreement ; and (ii) for
working capital and general corporate purposes. The Public Offering is expected to
close on or about August 21 , 201 9 and is su bject to customary closing conditions,
including stock exchange approvals, the concurrent closing of the New Credit Facility
and the Private Placements, and repayment of the LMM Facility in full under the
Payout Agreement.
New Credit Facility
The New Credit Facility is a US$20.0 million principal amount senior secured credit
facility. The maturity date of the New Credit Facility will be 24 months from the date
of the first advance under the facility. The Company also has the option to extend t he
maturity date by one year in exchange for a payment in common shares or cash of
three percent of the outstanding principal amount of the New Credit Facility two
business days prior to the original maturity date. Amounts outstanding under the New
Credit Facility will bear interest at a rate of 11.00% per annum, compounded monthly.
Under the New Credit Facility, the Sprott Lenders will have a first priority lien on (i) the
issued shares of Platinum Group Metals (RSA) Proprietary Limited (“ PTM RSA”) and
Waterberg JV Resources Proprietary Limited held, directly or indirectly, by the
Company (and such other claims and rights described in the applicable pledge
agreement) and (ii) all of the Company’s present and after -acquired personal
property. The New Credit Facility is also guaranteed by PTM RSA.
The US$20.0 million advance under the New Credit Facility is subject to certain
conditions precedent, including concurrent closings of the Private Placements and
completion of the Public Offering.
In connectio n with the US$20.0 million advance, the Company will issue the Sprott
Lenders 800,000 common shares of the Company . The issuance of such common
shares is subject to stock exchange approvals.
Deepkloof Private Placement
The Company entered into the Deepkloof Subscription Agreement with Deepkloof, for
the sale of 6,940,000 common shares of the Company at a price of US$1.32 per
share, for aggregate gross proceeds to the Company of US$9,160,800. The
Deepkloof Private Placement closing is subject to cust omary closing conditions,
including stock exchange approvals.
Payout Agreement and LMM Private Placement
The Company has entered into the Payout A greement and the LMM Subscription
Agreement with LMM. Unde r the LMM Subscription Agreement, the Company will
sell LMM 7,575,758 of the Company’s common shares at a price of US $1.32 per
share, for aggregate gross proceeds to the Company of US$10.0 million. The
proceeds raised pursuant to the LMM Private Placement must be used to repay
outstanding debt under the LMM Facility (the “Debt”). Under the Payout Agreement,
after applying the proceeds from the LMM Private Placement against the Debt , the
Company will repay the remaining balance of the Debt under the LMM Facility in full ,
pursuant to the ter ms of the Payout Agreement, by paying LMM US$33.0 million by
August 31, 2019. The Company expects to repay the LMM Facility in full using the
proceeds of the Public Offering, the Private Placements and the advance under the
New Credit Facility.
This news release shall not constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of the Offered Shares or the Option Shares in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of that jurisdiction.
The Company has filed a Registration Statement (including a prospectus and the
preliminary prospectus relating to the Offered Shares and Option Shares) with the
SEC for the Public Offering to which this communication relates. Before you invest,
you should read the prospectus in that Registration Statement and other documents
the Company has filed with the SEC for more complete information about the
Company and the Public Offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov. Alternatively, the Company, any
underwriter or any dealer participating in the Public Offering will arrange to send you
the prospectus if you request it by calling toll-free 1-800-414-3627.
About Platinum Group Metals Ltd.
Platinum Group Metals Ltd. is the operator of the Waterberg Project, a bulk
underground palladium and platinum deposit located in South Africa. Platinum Group
is listed on the NYSE American Exchan ge (PLG:NYSE.A) and the Toronto Stock
Exchange (PTM:TSX). Waterberg was discovered by Platinum Group and is being
jointly developed with Impala Platinum Holdings Limited, the Japan Oil, Gas and
Metals National Corporation (JOGMEC) and Hanwa Co. Ltd. The Co mpany recently
founded Lion Battery Technologies in partnership with Anglo American Platinum to
support the use of palladium and platinum in lithium battery applications.
For further information, please contact:
R. Michael Jones, President
or Kris Begic, VP, Corporate Development
Platinum Group Metals Ltd., Vancouver
Tel: (604) 899-5450 / Toll Free: (866) 899-5450
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The Toronto Stock Exchange and the NYSE American LLC have not reviewed and do
not accept responsibility for the accuracy or adequacy of this news release, which has
been prepared by management.
This press release contains forward -looking information within the meaning of
Canadian securities laws and forward -looking statements within the meaning of U.S.
securities laws (collectively "forward -looking statements"). Forward -looking
statements are typically identified by words such as: believe, expect, anticipate,
intend, estimate, plans, postulate and similar expressions, or are those, which, by
their nature, refer to future events. All statements tha t are not statements of historical
fact are forward-looking statements. Forward-looking statements in this press release
include, without limitation, statements regarding the repayment of the Debt owing
under the LMM Facility, funding of the advance under the New Credit Facility and the
use of proceeds thereunder, the potential completion of the Public Offering, including
the use of proceeds of the Public Offering, the potential completion of the LMM
Private Placement and the use of proceeds therefrom, and the potential completion of
the Deepkloof Private Placement and the use of proceeds therefrom. Although the
Company believes the forward -looking statements in this press release are
reasonable, it can give no assurance that the expectations and assumptions in such
statements will prove to be correct. The Company cautions investors that any
forward-looking statements by the Company are not guarantees of future results or
performance, and that actual results may differ materially from those in forward -
looking statements as a result of various factors, including, but not limited to, that the
Company may be unsuccessful in satisfying the conditions to closing of the Public
Offering, Private Placements and the advance under the New Credit Facility,
including, but not limited to, obtaining Toronto Stock Exchange and NYSE American
approvals; that the transactions described herein may not be completed on the terms
and timeline indicated; additional financing requirements; the Company’s ability to
comply with the term s of its indebtedness; cash flow and going concern risks; risks
related to the Waterberg definitive feasibility study; risks of delays in the development
of the Waterberg Project; variations in market conditions; the nature, quality and
quantity of any min eral deposits that may be located; metal prices; other prices and
costs; currency exchange rates; any disagreements with other shareholders of the
Company’s subsidiaries; the Company's ability to obtain any necessary permits,
consents or authorizations required for its activities and to comply with applicable
regulations; the Company's ability to produce minerals from its properties successfully
or profitably, to continue its projected growth, or to be fully able to implement its
business strategies; the Company’s ability to regain compliance with NYSE American
continued listing standards; and other risk factors described in the Company's Form
20-F annual report, annual information form and other filings with the SEC and
Canadian securities regulators , which may be viewed at www.sec.gov and
www.sedar.com, respectively. Any forward -looking statement speaks only as of the
date on which it is made and, except as required by applicable securities laws, the
Company disclaims any intent or obligation to update any forward-looking statements,
whether as a result of new information, future events or results or otherwise.