Olivut Resources (OLV-V)
www.olivut.com
34.7 million o/s
Insiders 7%
Pierre Lassonde 18%
Fidelity Investments 9%
$1.2 million (as of Jan 31, 2012)
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Olivut Resources (OLV-V) signs $18-million securities purchase by Lind
March 12, 2013 - News Release
Olivut Resources Ltd. has entered into a securities purchase agreement to raise up to $18-million over approximately the next 36 months in a tranched placement of securities to the Canadian Special Opportunity Fund LP, a fund managed by the Lind Partners LLC, a New York-based asset management firm focused on junior natural resource companies. It is anticipated that the initial cash advance date under the agreement will occur on March 13, 2013. Management believes that this non-exclusive, long-term financing commitment provides Olivut with additional growth capital to proceed confidently to create value for Olivut shareholders. The financing commitment is an innovative investment structure that is new in Canada. It has been used by Lind to finance numerous junior mining companies in other markets. Olivut and Lind have worked together to adapt this structure to obtain all required approvals from the Canadian regulatory bodies and the TSX Venture Exchange. Olivut is pleased to be the first to access capital under this structure in Canada and is especially positive about this development, given the extremely challenging equity environment for junior financing. Management of Olivut is very pleased to be working with Lind, which has a long record of investing in junior mining companies. The company has confidence in the supportive nature of Lind and looks forward to the regular periodic influx of capital to facilitate longer-term corporate planning. The non-exclusive nature of this financing allows the company the flexibility to pursue additional financing alternatives as market opportunities arise.
Olivut intends to use the proceeds to supplement its current cash position of approximately $1.1-million, to continue Olivut's exploration programs and for working capital purposes.
Subject to the terms and conditions of the agreement, Lind will invest $500,000 on the initial cash advance date and $200,000 every month (approximately) over the following 35 months. Tranches may be increased to a maximum of $500,000 upon mutual agreement between Olivut and Lind and may be less than $200,000 after the first tranche if any single tranche exceeds 0.55 per cent of the company's market capitalization. The initial investment of $500,000 consists of: (i) a $300,000 callable, convertible security that may be converted into 689,655 units; the first 500,000 units issued shall be composed of one common share and one warrant (the warrant entitling the holder to purchase one common share, as further described herein), and the remaining units issued shall be exercisable for one common share; and (ii) $200,000 to purchase common shares, expected to be issued on April 9, 2013. A maximum of 500,000 warrants may be issued to Lind.
The convertible security has a term of 36 months with a 0-per-cent interest rate and is unsecured and subordinated. Lind has the right to call the security at any time commencing upon the earlier of: (i) the date six months following the date of the agreement or (ii) the date on which the company terminates the agreement. The convertible security may be converted into units any time after the initial cash advance date.
The 500,000 warrants that may be issued entitle the holder to purchase common shares at 59.57 cents per share until the date that is 36 months after the initial cash advance date. Half vests immediately, and half vests upon the earlier of the date that is 12 months after the initial cash advance date or immediately upon termination of the agreement by the company.
The number of common shares issued in the subsequent tranches will be calculated based on a price per common share equal to 92.5 per cent of the daily volume-weighted average price per common share on the TSX Venture Exchange for the five days chosen by Lind out of the 20 trading days preceding such issuance date and provided such price will not be less than the higher of: (i) the closing price per common share or (ii) the volume-weighted average price per common share on the TSX-V on the trading day immediately preceding the relevant cash advance date, in either case, less the maximum permitted discount under TSX-V regulations.
The agreement includes explicit no-shorting provisions (including that Lind, its affiliates, associates and insiders will not sell Olivut shares that they do not hold in their inventory and that they do not own outright; presell shares that they expect to receive or have contracted to receive, where such shares have not yet been issued and delivered to it; borrow shares to be sold; or borrow shares to cover a short position), a floor price which enables Olivut to refuse to issue stock below 40 cents and the option for Olivut to terminate the agreement at any time, subject to compliance with the terms of the agreement.
As part of the financing, Lind will receive a commitment fee of $200,000 payable in 505,944 common shares.
Common shares issued in approximately monthly tranches and for the commitment fee will be qualified for resale in Canada by a prospectus and issued to Lind utilizing an exemption from U.S. securities laws. The convertible security and underlying common shares and warrants will be issued under exemptions from Canadian and U.S. securities laws and will be subject to a four-month hold period. Shareholders will be updated on a quarterly basis regarding the number of shares issued. If tranches deviate from $200,000, a press release will explain the financing details.
The agreement, and any issuance of securities made thereunder, is subject to receipt of all required regulatory approvals, including the approval of the TSX Venture Exchange and applicable securities regulatory authorities. In connection with the agreement, Olivut will file the agreement and a supplement to the final base-shelf prospectus that it currently has filed with the securities regulators in Alberta, Ontario and British Columbia. Olivut and Lind have jointly applied for and obtained an order for exemptive relief from certain requirements of the securities laws of such jurisdictions. The company's current base-shelf prospectus is filed on SEDAR.
The Lind Partners is a New York-based asset management firm that manages the Canadian Special Opportunity Fund and the Australian Special Opportunity Fund LP. The Lind team has been investing in junior natural resource companies since 2009 and has completed more than 35 direct investment transactions -- similar to this investment in Olivut -- for more than $385-million of total transaction value, mainly in Australian publicly traded junior companies in mining, oil and gas, biotech, and clean tech.
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