Deal replaces C$4 million proposal from Augyva Mining, company says
By Devika Patel
Knoxville, Tenn., June 29 - Niocan Inc. priced a private placement of units with investor Nio-Metals Holdings LLC and ignored a June 27 proposal from investor Augyva Mining Resources Inc. for a C$4 million private placement of equity, saying it preferred the Nio-Metals offering, which will raise between C$2 million and C$4 million.
The company will sell between 2,000 and 4,000 units of one C$1,000 10% debenture and 370 warrants at C$1,000.00 per unit. Nio-Metals will purchase at least 2,000 units, and Niocan may seek other purchasers for the additional 2,000 units.
Each one-year debenture may be converted to shares at C$1.45 per common share. Niocan may redeem the debentures prior to maturity at 105.
Each warrant is exercisable at C$1.45 for two years. The strike price and conversion price is a 20.83% premium to the June 28 closing share price of C$1.20.
Settlement is expected July 29. Nio-Metals may also nominate one member of the company's board of directors.
The company acknowledged that it also received a revised financing proposal from Augyva on June 27 and said it believes that the new term sheet is superior to the Augyva proposal and in the best interests of shareholders because the conversion price and the strike price of C$1.45 is superior to the C$1.30 per-unit price and C$1.35 exercise price proposed by Augyva.
In a separate press release, Augyva said it had not received a response from the company about its proposal and said it believed its offer was at a "significant premium."
"We still sincerely believe that Augyva's revised superior financing proposal offers a significant premium than the one contemplated among Niocan and Forbes & Manhattan, Inc., as disclosed by Niocan in a press release dated May 4," Augyva's president and chief executive officer, Georges-Yvan Gagnon, said in the press release. "Augyva's revised proposal is not subject to any conditions other than the execution of a subscription agreement and regulatory approval, and no due diligence review from our part shall be required. Accordingly, Augyva's revised offer, including the improved pricing, maximizes Niocan shareholder value. We are confident to be able to close the financing within a very short period of time, should Niocan accept our proposal."
Niocan is a Montreal-based niobium exploration company.
| Issuer: | Niocan Inc.
|
| Issue: | Units of one C$1,000 principal amount of debenture and 370 warrants
|
| Amount: | C$2 million (minimum), C$4 million (maximum)
|
| Units: | 2,000 (minimum), 4,000 (maximum)
|
| Price: | C$1,000
|
| Maturity: | One year
|
| Coupon: | 10%
|
| Call: | At 105
|
| Conversion price: | C$1.45
|
| Warrants: | 370 warrants per unit
|
| Warrant expiration: | Two years
|
| Warrant strike price: | C$1.45
|
| Investor: | Nio-Metals Holdings LLC (for at least C$2 million)
|
| Pricing date: | June 29
|
| Settlement date: | July 29
|
| Stock symbol: | Toronto: NIO
|
| Stock price: | C$1.20 at close June 29
|
| Market capitalization: | C$24.92 million
|
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