By Angela McDaniels
Tacoma, Wash., June 4 - First Bauxite Corp. has entered into a convertible note purchase agreement with the Pacific Road Resources Funds providing for financing in two phases, according to a company news release.
In the first phase, the investors will subscribe for C$8 million principal amount of 0% five-year notes that are convertible into common shares at a conversion price of C$0.83.
In the second phase, the investors will have the option of purchasing $20 million of additional notes.
The second-phase notes will have a conversion price equal to the greater of C$1.245 and the maximum discount allowed by the TSX Venture Exchange, but in any event not less than a 20% discount to the volume-weighted average closing price of the company's common shares for the 20 trading days preceding the day on which the investors choose to subscribe for the notes.
In any case, the second-phase conversion price will not be greater than C$2.00 per share, and it will be reduced as needed to ensure that the shares issuable will not be less than 15% of the company's common shares on a fully diluted basis - provided that the conversion price will not be reduced below the first-phase conversion price.
Proceeds will be used primarily to fund a pre-feasibility study on the Bonasika Mining License in Guyana, the purchase of a drill rig and additional drilling on its Bonasika and Waratilla-Cartwright bauxite licenses in Guyana and to fund development and construction of a mine and processing facilities for the company's high-alumina refractory-grade bauxite deposits.
The financing is subject to shareholder approval, and the second phase is conditioned on the pre-feasibility study.
The company will pay finders fees to two finders in the amount of 3.75% of the proceeds. The finders will also receive warrants equal to 7% of the common shares issuable upon conversion of the phase-one notes.
Upon the closing of the first phase of the financing, the subscribers will have the right to appoint one nominee to the board of directors.
First Bauxite is based in Vancouver, B.C., and explores and develops bauxite deposits.
| Issuer: | First Bauxite Corp.
|
| Issue: | Convertible notes
|
| Amount: | C$8 million in first phase, $20 million in second phase
|
| Maturity: | Five years
|
| Coupon: | 0%
|
| Price: | Par
|
| Conversion price: | C$0.83 for first phase, to be determined for second phase
|
| Warrants: | No
|
| Investors: | Pacific Road Resources Funds
|
| Pricing date: | June 4
|
| Stock symbol: | TSX Venture: FBX
|
| Stock price: | C$0.06 at close June 3
|
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