EPM Mining Ventures Inc. Announces Private Placement With EMR Capital Resources Fund 1, LP
Highlights: - EPM Mining Ventures successfully completes financing commitment to provide the company not less than C$85 million or one-third of project equity in three tranches based upon achievement of certain milestones. - Experienced resource investor EMR Capital Resources Fund 1, LP subscribes for 34,516,129 Units of EPM at C$0.30 per Unit for gross proceeds of C$10,354,839. Each Unit is composed of one common share of EPM and one common share purchase warrant at C$0.4243 per share for an additional C$14,645,194 with a further commitment from EMR to provide C$60 million or up to one-third of project equity. - Investment proceeds will to be used to accelerate the development of the company's sulphate of potash project at the Sevier Playa in Utah.
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 05/12/15 -- EPM Mining Ventures Inc. ("EPM" or the "Company") (TSX VENTURE: EPK)(OTCQX: EPKMF) announced that it has entered into an agreement (the "Subscription Agreement") with EMR Capital Resources Fund 1, LP ("EMR") pursuant to which EPM will issue to EMR 34,516,129 units of EPM (the "Units") at C$0.30 per Unit for gross proceeds of C$10,354,839, with each Unit being composed of one common share of EPM (a "Common Share") and one Common Share purchase warrant (a "Warrant") for an aggregate of 34,516,129 Common Shares and 34,516,129 Warrants (together, the "Offering"). Each Warrant will entitle the holder to subscribe for one Common Share at a price of C$0.4243 per Common Share for a period of 24 months following the closing of the Offering. However, subject to the achievement of certain milestones, EMR will be deemed to irrevocably exercise the Warrants into 34,516,129 Common Shares at a price of C$0.4243 per Common Share for gross proceeds of C$14,645,194 with an additional investment commitment of not less than C$60 million, or one-third of the project equity commensurate with EMR's pro rata share of EPM's Sevier Playa SOP Project (the "Project") project equity value based upon the net present value to be determined by the Company's planned Feasibility Study.
"We are very pleased that cornerstone-investor EMR Capital is making this substantial commitment to our company," said Lance D'Ambrosio, Chief Executive Officer of EPM. "This is a significant milestone towards advancing the Project. EMR has a team with a proven history of developing and operating resource properties that will benefit EPM's ability to fast-track our efforts as we evolve from development phase to construction-ready stage."
"EMR considers itself to be a knowledgeable resource investor," said Owen Hegarty, Chairman of EMR. "Potash is one of our four preferred commodities and we see our EPM investment as dovetailing very well with our MOP investment Highfield Resources. EPM shares the same criteria that compelled our investment in Highfield: promising resource, lowest quartile CapEx and OpEx, great jurisdiction, proven mining process, access to existing infrastructure and excellent management. Additionally, EPM will produce SOP, a specialty fertilizer, as well as other likely minerals that add to our excitement for investing in the company."
The closing of the Offering is subject to certain customary closing conditions set out in the Subscription Agreement, including the approval of the TSX Venture Exchange (the "TSXV") and the consent of shareholders of EPM. EPM intends to use the proceeds of the Offering towards funding its development program including its advanced fieldwork identified in its Preliminary Feasibility Study and permitting efforts to deliver a draft Environmental Impact Statement. If applicable, proceeds from the exercise of Warrants will be used by EPM to fund (i) the completion of its feasibility study, (ii) an Environmental Impact Statement and permitting, and (iii) for general working capital purposes.
The closing of the Offering will take place on the third business day following the satisfaction (or waiver, if applicable) of the closing conditions specified in the Subscription Agreement, or such other date as EPM and EMR may agree, but in any event no later than June 30, 2015. All of the securities issued pursuant to the Subscription Agreement will be subject to a four month and one day hold period from the date of issuance.
About EMR
EMR Capital Resources is a specialist private equity manager whose team has a proven track record in the dimensions critical to achieving superior returns. The team has demonstrated success in resource exploration, development, and operation as well as in the commercialization of resource projects. Further, the company has deep links to Asian markets and, in particular, to commodity purchasers, end-users, resources companies, investors, and governments. Lastly, the team has extensive private equity investment management experience and follows an investment strategy that allows their highly experienced team to identify and unlock value from high-quality asset opportunities at various stages of the mining life cycle. EMR Capital has offices in Melbourne, Sydney and networks across the globe, including an office at 89 Nexus Way, Camana Bay, Grand Cayman, Cayman Islands, KY1-9007.
Extract Capital Credit Agreement
Effective March 30, 2015, EPM and Extract Capital LLC ("Extract Capital") agreed to amend the credit agreement (the "Amendment") dated May 2, 2014 among EPM, certain of its subsidiaries, Extract Capital, and certain lenders from time to time. The Amendment provides for a waiver by Extract Capital of a mandatory repayment covenant with respect to the initial equity investment by EMR of C$10,354,839. The Amendment also requires EPM to, from and after the earlier of the closing of the Offering and July 1, 2015, continuously maintain at least $500,000 in working capital.
Extract Capital is a long/short equity fund focused on the junior resource sector. The fund targets investments with strong management teams and early-stage assets that are underperforming the market while putting lessor importance on market trends and popularity. By utilizing its in-house technical expertise, extensive relationships across the sector, and proprietary database, Extract makes investments that can realize significant gains in a 6 to 24 month time frame.
The Relationship Agreement
Pursuant to the terms of the Subscription Agreement, at the closing time EMR and EPM will enter into a relationship agreement (the "Relationship Agreement"), which will provide for certain rights, obligations and responsibilities of the parties over the term of the Relationship Agreement and in respect of the Project. The term of the Relationship Agreement will be for a period of five years from the date of closing of the Offering, providing EMR maintains an equity and voting interest in EPM of at least 15% during such time. The significant terms of the Relationship Agreement are described below:
The foregoing summary of the Relationship Agreement does not purport to be complete and is qualified in its entirety by reference to the Relationship Agreement, which is appended as Appendix "C" to the Subscription Agreement. The Subscription Agreement has been filed on EPM's SEDAR profile and is accessible at .
Success Fee
EPM was advised on the transaction by Ricardo Campoy and Joel Schneyer, Managing Directors in the Minerals Capital & Advisory practice of Headwaters MB ("Headwaters"). Headwaters is an independent, middle-market investment banking firm providing strategic merger and acquisitions, corporate finance services, and merchant banking through proprietary sources of capital. Headwaters is headquartered in Denver, Colorado, with 6 regional offices across the United States and partnerships with 18 firms covering 30 countries. For more information, visit .
Pursuant to an agreement with Headwaters dated October 15, 2013, as amended September 29, 2014 and May 8, 2015, EPM has agreed to pay to Headwaters in connection with the Offering a success fee equal to 4.0% of the value of the Offering (such fee being C$414,194) plus reasonable expenses. EPM has also agreed to pay to Headwaters a success fee of 4.0% upon the exercise of Warrants by EMR (such fee being C$585,808) and the exercise by EMR of the Investment Right (such fee being not less than approximately C$2,400,000). However, EPM and Headwaters have agreed that, should EPM retain Headwaters to assist with project financing in respect of the Project, the success fee on the Investment Right will be reduced from 4.0% to 2.0%. Payments to Headwaters will be made in accordance with the rules and policies of the TSXV, and subject to the applicable regulatory approvals.
Capitalization
Upon completion of the Offering, there will be 146,450,071 Common Shares outstanding of which EMR will own or control 34,516,129 Common Shares, representing approximately 23.6% of the outstanding Common Shares, on an undiluted basis. If EMR were to exercise the Warrants, there would be 180,966,200 Common Shares outstanding on a partially diluted basis of which EMR will own or control 69,032,258 Common Shares, representing approximately 38.1% of the outstanding Common Shares on a partially diluted basis.
The following table sets forth the capitalization of EPM as at December 31, 2014, the date of the most recent consolidated financial statements filed by EPM, before and after giving effect to the Offering and the exercise of Warrants. The table should be read in conjunction with the consolidated financial statements of EPM, including notes thereto, and the associated management's discussion and analysis.
Note:
TSXV
The completion of the Offering will materially affect the control of EPM and may result in the creation of a new "Control Person", and a "Change of Control" of EPM, within the meaning of the rules and policies of the TSXV, and, accordingly, EPM is seeking the written consent of disinterested shareholders holding over 50% of its issued and outstanding Common Shares in accordance with the rules and policies of the TSXV.
About EPM Mining Ventures
EPM is a development-stage company focused on specialty fertilizers. Through Peak Minerals Inc., its indirect wholly owned subsidiary, EPM controls directly or through agreement, mineral leases on more than 124,000 acres on its Sevier Lake Playa property in Millard County, Utah. With a brine resource known to contain potassium, magnesium, sulphate, lithium, and a suite of other beneficial minerals, EPM is targeting the development and production of specialty fertilizers, including SOP, through the use of a cost-effective solar evaporation process. SOP and other specialty fertilizers are used in the production of high value, chloride-sensitive crops such as fruits, vegetables, and tree nuts. With the completion of a Preliminary Feasibility Study, EPM is currently engaged in engineering and analysis designed to support a feasibility study, environmental permitting, and ultimately mineral production.
For more information, please visit our web site at .
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 release.
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the Offering and the closing thereof, the entry by the parties into a Relationship Agreement, the exercise of Warrants, the exercise by EMR of its Investment Right and obtaining any applicable regulatory approvals therefor, the appointment of the Subscription Nominees and EPM's future business. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of EPM to be materially different from those expressed or implied by such forward-looking information, including risks associated with the future business and development of EPM and the actual terms of any agreement that would be entered into in respect of the transactions described in this press release. Although EPM has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. EPM does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Contacts:
EPM Mining Ventures Inc.
Lance D'Ambrosio
Chief Executive Officer
801-485-0223
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Datum: 12.05.2015 - 11:28 Uhr
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