TVI Pacific Announces Funding Commitment, Promissory Notes Amendments, Limited Standstill Waiver and Share Purchase
TVI PACIFIC ANNOUNCES FUNDING
COMMITMENT, PROMISSORY NOTES
AMENDMENTS, LIMITED STANDSTILL
WAIVER AND SHARE PURCHASE
CALGARY, AB
,
May 28, 2024
/CNW/ - TVI Pacific Inc. (TSXV: TVI) (OTC Pink: TVIPF) ("
TVI
" or
the "
Company
") is pleased to announce that the Company has entered into a funding commitment
agreement on
May 27, 2024
(the "
Funding Commitment Agreement
") with Prime Resources
Holdings, Inc. (the "
Lender
"), whereby the Lender has agreed to commit to fund Shortfall Amounts
(as defined below) to the extent that the Issuer is unable to pay such amounts as they become due.
Pursuant to the terms of the Funding Commitment Agreement, the Lender has agreed to fund the (i)
certain legacy expenses of the Company, provided that the aggregate amount of such expenses
shall not exceed approximately
$3.3 million
; and (ii) the costs and expenses of TVI incurred in the
normal and ordinary course of its business which are necessary to enable TVI to continue its
operations in the same manner and to the same extent as conducted immediately prior to the date of
the Funding Commitment Agreement for a period of three (3) years and in an annual amount not to
exceed approximately
$1.95 million
(collectively, the "
Shortfall Amounts
"). The advances will be
evidenced by the issuance of unsecured interest-bearing promissory notes, which are expected to
accrue interest at a rate of prime plus 2.0% per annum and, subject to certain acceleration events,
mature eighteen (18) months after the date of issuance.
Concurrently with entering into the Funding Commitment Agreement, the Lender advanced two (2)
loans in the aggregate principal amounts of
$144,658
and
$110
,301 by way of unsecured interest-
bearing promissory notes (the "
Promissory Notes
"), each substantially on the above terms and
which, subject to certain acceleration events, mature in
November 2025
.
The Company intends to use the proceeds available from the Promissory Notes and the Funding
Commitment Agreement to fund certain accrued expenses of the Company and for working capital
and general corporate purposes.
Amending Agreements
Further to the Company's news release of
April 16, 2024
, TVI and the Lender also entered into an
amending agreement dated effective as of
May 15, 2024
(the "
Amending Agreement
") to amend:
(i) the unsecured interest-bearing promissory note issued by the Lender dated effective as of
April 8,
2024
("
Promissory Note 1
") in the principal amount of
$171,732
; and (ii) the unsecured interest-
bearing promissory note issued by the Lender dated effective as of
April 12, 2024
in the principal
amount of
$71,196
("
Promissory Note 2
", and together with Promissory Note 1, the "
Initial
Notes
"). Pursuant to the terms of the Amending Agreement, the Company and the Lender agreed to
extend the deadline by which certain acceleration events may occur from
May 15, 2024
to
May 24,
2024
(the "
First
Amendment
" and together with the Funding Commitment Agreement and issuance
of the Promissory Notes, the "
Transactions
"). The other terms of the Initial Notes remain
unchanged.
On
May 27, 2024
, TVI and the Lender entered into a second amending agreement (the "
Second
Amending Agreement
", and together with the First Amending Agreement, the "
Amending
Agreements
") to further amend the Initial Notes (as amended by the First Amendment). Pursuant to
the terms of the Second Amending Agreement, the Company and the Lender agreed to, among
other things, further extend the deadline by which certain acceleration events may occur from
May
24, 2024
to
June 20, 2024
(the "
Second Amendment
" and together with the First Amendment, the
Funding Commitment Agreement and issuance of the Promissory Notes, the "
Transactions
"). The
other terms of the Initial Notes (as amended by the First Amendment) remain unchanged.
Limited Standstill Waiver and Share Purchase
TVI and the Lender are parties to a standstill agreement dated
August 15, 2023
entered into in
connection with the completion of a non-brokered private placement by TVI to the Lender. Pursuant
to such agreement, among other things, prior to
August 15, 2025
, neither the Lender, nor any of its
affiliates, may acquire any voting or equity securities of TVI without the prior written consent of TVI.
Pursuant to a consent and limited waiver agreement dated as of the date hereof, TVI approved a
limited waiver (the "
Limited Waiver
") of such restriction in connection with entering into the Share
Purchase Agreement (as defined below) and the acquisition of any securities of TVI beneficially
owned, or over which control or direction is exercised, directly or indirectly, by Mr.
Clifford M. James
("
Mr. James
").
Concurrent with the completion of the Funding Commitment Agreement and approval of the Limited
Waiver, the Lender, Mr. James, Seajay Management Enterprises Ltd. ("
Seajay
") and Regent
Parkway 3202 Management Inc. ("
Regen
t", and together with Mr. James and Seajay, the
"
Vendors
") entered into a share purchase agreement (the "
Share Purchase Agreement
") dated
May 27, 2024
and pursuant to which PRHI is expected to purchase an aggregate of 58,055,488
common shares in the capital of TVI (the "
Common Shares
") beneficially owned, directly or
indirectly, by Mr. James (the "
Share Transfer
"), the Chairman, President and Chief Executive
Officer of TVI.
In connection with the Share Transfer (i) the Lender, of 3L Starmall Las Pinas, CV Starr Avenue,
Philamlife Village, Pamplona, Las Pinas City, Metro
Manila, Philippines
, intends to acquire ownership
of 58,055,488 Common Shares, (ii) Mr. James, of 3202 Regent Parkway, 21st Drive, Bonifacio
South District, Bonifacio Global City, Taguig City,
Philippines
1634, intends to dispose of beneficial
ownership in 58,055,488 Common Shares held by the Vendors, each requiring disclosure pursuant
to National Instrument 62-104 –
Take-Over Bids and Issuer Bids
.
The Lender holds, directly or indirectly, an aggregate of 86,933,333 Common Shares (representing
approximately 11.93% of the Common Shares). Immediately following completion of the Share
Transfer, the Lender is expected to hold, directly and indirectly, an aggregate of
144,988,821 Common Shares (representing approximately 19.90% of the issued and outstanding
Common Shares).
Mr. James holds, directly or indirectly, an aggregate of 83,264,419 Common Shares (representing
approximately 11.43% of the Common Shares). Immediately following completion of the Share
Transfer, Mr. James is expected to hold, directly or indirectly, an aggregate of 25,208,937 Common
Shares (representing approximately 3.48% of the issued and outstanding Common Shares).
Copies of the early warning reports will be filed by the Lender and Mr. James under the Company's
profile on SEDAR+ at
www.sedarplus.ca
or may be obtained by contacting the Company at the
contact information provided below.
The Lender is a "related party" of the Company, and entering into of the Transactions and the
matters relating thereto are considered to be "related party transactions" within the meaning of
Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special Transactions
("
MI
61-101
") requiring the Company, in the absence of exemptions, to obtain a formal valuation and
minority shareholder approval, of the related party transactions.
Pursuant to Sections 5.5(b) and 5.7(1)(f) of MI 61-101, the Company relied on exemptions from the
formal valuation and minority shareholder requirements, respectively, as, in addition to no securities
of the Company being listed or quoted on certain specified exchanges, the Transactions and matters
relating thereto are non-convertible loans obtained on reasonable commercial terms that are not less
advantageous to the Company than if the Transactions and matters relating thereto were obtained
from a person dealing at arm's length and not repayable, directly or indirectly, in equity or voting
securities of the Company or a subsidiary.
The Transactions, the Limited Waiver and the matters relating thereto were each approved by the
independent directors of the Company (the "
Independent Directors
"), being all directors other than
Messrs.
Clifford James
,
Manuel Paolo A. Villar
and
Michael G. Regino
. An informal committee of the
Independent Directors was established in connection with the Transactions and the Limited Waiver
and all of the Independent Directors were engaged in respect thereof. No materially contrary view or
abstention was expressed or made by any director of the Company in relation thereto. To the
knowledge of the Company, there is no material information concerning the Company or its
securities that has not been generally disclosed.
Neither the Company nor any director or senior officer of the Company has knowledge, after
reasonable inquiry, of any prior valuation in respect of the Company that relates to the subject
matter of or is otherwise relevant to the Transactions and the matters relating thereto, which has
been made in the 24 months prior to the date of this News Release. The Company did not file a
material change report more than 21 days before the expected closing as the details of the
Transactions and the matters relating thereto were not finalized until immediately prior to its
issuance, and the Company wished to close the Transactions and the matters relating thereto as
soon as practicable for sound business reasons.
About TVI Pacific Inc.
TVI Pacific Inc. is a Canadian resource company focused on mining projects in
the Philippines
, one
of the most prolifically mineralized countries in the world. TVI maintains a strong presence in
the
Philippines
through its 30.66% equity interest in TVI Resource Development Phils, Inc. (
"TVIRD"
), a
Philippines
corporation. Through TVIRD, TVI has ownership in TVIRD's 100%-owned Balabag
gold/silver mine, a currently producing mine, and is focused on ramping-up to commercial production
at TVIRD's recently restarted 100%-owned Siana gold mine. TVIRD also has in its portfolio of
projects its 100%-owned Mapawa project (gold), a 60% indirect interest in the Mabilo project (a
copper-gold-iron skarn deposit that offers potential for multi-metal products, namely copper, gold
and silver, with by-products magnetite and pyrite), and a 60% interest in Agata Mining Ventures Inc.
(nickel/iron DSO mine).
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Certain information set out in this News Release constitutes forward-looking information. Forward-
looking statements are often, but not always, identified by the use of words such as "seek",
"anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might",
"should", "believe", "scheduled", "to be", "will be" and similar expressions. Forward-looking
statements in this News Release include, but are not limited to: statements and information
concerning the Company's intended use of the proceeds from the Funding Commitment Agreement
and the Promissory Notes; the Transactions; the completion of the transactions contemplated by
the Share Purchase Agreement and the timing thereof; the Company's future activities and
operations; the availability of future draw-downs under the Funding Commitment Agreement and
use of proceeds thereof; and the terms of the Promissory Notes, including acceleration thereof.
Forward-looking statements in this News Release are based upon the opinions and expectations of
management of the Company and, in certain cases, information supplied by third parties as at the
effective date of such statements. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions and that information
received from third parties is reliable, it can give no assurance that those expectations will prove to
have been correct.
Forward-looking statements are subject to certain risks and uncertainties (known and
unknown) that could cause actual outcomes to differ materially from those anticipated or
implied by such forward-looking statements.
These risks and uncertainties include, but are not
limited to, the
Company being unable to use the proceeds of the Promissory Notes as described;
legal or regulatory impediments regarding the Initial Notes and the Promissory Notes, accrued and
unpaid interest thereon; the Company defaulting on the Initial Notes, the Promissory Notes or the
Funding Commitment Agreement and consequences thereof; the proceeds being insufficient for
the Company's purposes; the acceleration of maturity of the Initial Notes or the Promissory Notes
in accordance with the terms thereof upon the occurrence of certain events; the Company's
inability to repay the Initial Notes or the Promissory Notes on their respective maturity dates or at
all; the Company being unable to raise additional funds on terms acceptable to the Company or at
all; the availability of future drawn-downs under the Funding Commitment Agreement; the value of
the Company's assets; the availability of distributions to the Company from its joint venture interest
in TVIRD and results of operations thereof; liquidity and results of operations; and
general risks
such as changes in commodities and base metal prices general economic conditions in
the
Philippines
and elsewhere, litigation, legislative, environmental and other judicial, regulatory,
political and competitive developments, geopolitical risk, delays or failures to receive Board,
shareholder or regulatory approvals,
operational risks, risks related to meeting the continued listing
requirements of the TSX Venture Exchange, those additional risks described in detail in the
Company's Annual Information Form for the year ended
December 31, 2023
, which was filed on
SEDAR+ on
April 29, 2024
, and is available under the Company's profile at
www.sedarplus.ca
,
and other matters discussed in this News Release.
Accordingly, readers should not place undue reliance upon the forward-looking statements
contained in this News Release and such forward-looking statements should not be
interpreted or regarded as guarantees of future outcomes.
The forward-looking statements contained in this News Release are made as of the date hereof
and the Company does not undertake any obligation to update or to revise any of the included
forward-looking statements, except as required by applicable securities laws in force in
Canada
.
The forward-looking statements contained herein are expressly qualified by this cautionary
statement.
Neither 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
News Release.
SOURCE
TVI Pacific Inc.
View original content:
http://www.newswire.ca/en/releases/archive/May2024/28/c4001.html
%SEDAR: 00001837E
For further information:
Patrick Hanna, Chief Financial Officer, TVI Pacific Inc., Phone: 403-265-
4356, E-mail: [email protected]
CO: TVI Pacific Inc.
CNW 14:29e 28-MAY-24