Resource Capital Fund VI L.P. Announces Amendments to Loan Agreement with Talon Metals Corp.
PRESS RELEASE
Resource Capital Fund VI L.P. Announces Amendments to
Loan Agreement with Talon Metals Corp.
January 20, 2017, Denver, Colorado. Resource Capital Fund VI L.P. (“ RCF VI”) reports
that on January 18, 2017 the amendment (the “ Amending Agreement ”) to the loan
agreement dated November 25, 2015 (the “ Loan Agreement ”) became effective.
Pursuant to the terms of the Amending Agreement, RCF VI agreed to increase the
principal amount of the unsecured loan previously advanced to Talon from
US$14,000,000 to US$16,000,000.
As consideration for the RCF VI’s agreement to increase the principal loan amount,
Talon issued 15,000,000 common share purchase warrants (the “Warrants”) to RCF VI.
Each Warrant is exercisable for one common share of Talon (each a “ Warrant Share”)
at an exercise price of C$0.11 per Warrant Share until January 18, 2021.
Under the Loan Agreement, as amended, by the Amending Agreement, RCF VI
maintains the right to elect to convert all or part of the principal amount of the unsecured
loan (including capitalized interest) into Comm on Shares at any time, at a conversion
price of C$0.156 per Common Share. The outstanding principal amount under the Loan
Agreement, as amended, will continue to bear interest at a rate of 12% per annum until
the maturity date, being the earlier of: (i) November 25, 2018; and (ii) the date upon
which RCF VI elects to accelerate the due date upon the occurrence of certain events,
including an event of default.
Any amount being converted pursuant to RCF VI’s conversion right shall be converted
from United States dollars into Canadian dollars based on the currency exchange rate as
reported by Bloomberg as of 5:00 p.m. (EST) on the first business day preceding the
conversion date.
Prior to the Amending Agreement becoming effective and the issuance of the Warrants,
RCF VI owned 12,376,097 Common Shares, representing approximately 9.5% of the
129,645,201 then issued and outstanding Common Shares. Assuming the full
conversion of the principal amount and capitalized interest before the Amending
Agreement became effective and the issuance of the Warrants, RCF VI would own
129,419,686 Common Shares (based on the exchange rate on January 17, 2017)
representing approximately 52.5% of the 246,688,790 then issued outstanding Common
Shares on a partially diluted basis.
Upon effectiveness of the Amending Agreement and assuming only the exercise of the
newly issued Warrants, RCF VI would hold 27,376,097 Common Shares representing
approximately 18.9% of the 144,645,201 then issued outstanding Common Shares on a
partially diluted basis.
Upon effectiveness of the Amending Agreement and assuming the full conversion of the
increased principal amount, capitalized interest, expected capitalized interest and the
exercise of the newly issued Warrants, RCF VI would hold 208,021,408 Common
Shares (based on the exchange rate on January 17, 2017), representing approximately
63.9% of the 325,290,512 then issued and outstanding Common Shares on a partially
diluted basis.
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The Warrants were issued by Talon and not acquired on the secondary market. RCF VI
acquired the Warrants for investment purposes. RCF VI may from time to time acquire
additional securities, exercise convertible securities, dispose of some or all of the
existing or additional securities or may continue to hold the securities of Talon.
Talon’s head office is located at Craigmuir Chambers, P.O Box 71, Road Town, Tortola,
British Virgin Islands.
In accordance with applicable law, the Warrants will be subject to a four month hold
period commencing on January 18, 2017.
To obtain a copy of the early warning report filed under applicable Canadian securities
laws in connection with the transactions hereunder, please see Talon’s profile on the
SEDAR website www.sedar.com.
About Resource Capital Fund VI L.P.
RCF VI is a private investment fund existing under the laws of the Cayman Islands. For
further information and to obtain a copy of the early warning report, please contact:
Resource Capital Fund VI L.P.
1400 Sixteenth Street, Suite 200,
Denver, CO, 80202,
Telephone: (720) 946-1444
Attn: Molly Campbell