TORONTO, Nov. 5, 2018 /CNW/ - Desert Lion Energy Inc.
(TSXV: DLI) (OTCQB: DSLEF) ("Desert Lion" or the
"Company") is pleased to announce it has executed a note
purchase agreement (the "NPA") with AIP Asset Management and
AIP Global Macro Fund L.P. ("AIP") providing for a secured
convertible note financing for gross proceeds of up to $10,000,000 (the "Note Offering").
The initial tranche of secured convertible promissory notes (the
"Notes") for gross proceeds of $5,000,000 shall be purchased by AIP on the date
(the "Closing Date") certain standard conditions precedent
are satisfied, including, approval of the TSX Venture Exchange
("TSXV") and completion of the Equity Offering (as described
below). A second tranche of Notes for proceeds of an
additional $5,000,000 is also
available to the Company under the NPA to fund acquisitions as
mutually agreed by AIP and the Company.
The Notes may be converted to common shares of the Company at a
price of $0.20 per share at any time
prior to maturity, which is 24 months following the Closing Date.
The Notes will bear interest at a rate of 12% per annum with 8%
settled in cash and 4% settled by the issuance of common shares.
Interest will reduce to 8% per annum with all interest settled in
cash or shares, as determined by the Company, where the closing
price of the Company's common shares on the TSXV is at or above
$0.20 on the last trading day of any
month. On the Closing Date the Company shall pay a fee to AIP
to be settled by a cash payment of $150,000 and, subject to approval of the TSXV,
the issuance of 2,857,142 common shares.
The Company is also pleased to announce a non-brokered private
placement financing of 28,571,428 units (the "Units") at a
price of $0.07 per Unit for gross
proceeds of $2,000,000 (the
"Equity Offering" and together with the Note Offering, the
"Offering"). Each Unit is comprised of one common share of
the Company and one-half of one common share purchase warrant (a
"Warrant"). Each whole Warrant will entitle the holder
thereof to acquire one additional common share of the Company at a
price of $0.20 for a period of 24
months following the Closing Date.
Closing of the Offering is expected to occur on or about
November 23, 2018 and remains subject
to certain conditions, including receipt of all necessary
regulatory approvals, including the approval of the TSX Venture
Exchange. All securities issued in connection with the Offering
will be subject to a four month hold period.
"AIP's commitment to investment a minimum of $5,000,000 and up to $10,000,000 in conjunction with support from our
existing shareholders and management in the private placement
reiterates management's belief in the potential for the Desert Lion
Energy project," commented Tim
Johnston, CEO of Desert Lion Energy Inc. "The financing will
facilitate the continued advancement of both organic and strategic
growth initiatives as we develop a world class lithium
company."
"AIP invests in companies with strong management teams, world
class assets and large upside growth potential. This strategy used
by AIP Global Macro Fund LP has resulted in an average return of
over 40% per year since 2014. We are highly selective of
management teams and the companies we work with and we are proud to
announce that Desert Lion was able to meet these requirements"
commented Jay Bala, Senior Portfolio
Manager of AIP Asset Management.
Concurrently, the Company has entered into a loan agreement with
Pella Ventures Limited ("Pella"), pursuant to which Desert
Lion has borrowed $150,000. The loan
in unsecured, is subject to an interest rate of 8.0% per annum and
matures on December 31, 2018. The
Company expects to use the proceeds from the loan for general
corporate and working capital purposes.
Pursuant to Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI
61-101"), the loan constitutes a "related party transaction" as
Pella is a related party of Desert Lion as it is controlled by
Adonis Pouroulis, Chairman of the board of Desert Lion. The Company
is relying on an exemption from the formal valuation and minority
shareholder approval requirements of MI 61-101 pursuant to
exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101
on the basis that the value of the loans is less than 25% of the
Company's market capitalization.
About Desert Lion Energy
Desert Lion Energy is a
lithium exploration and development company focused on building
Namibia's first large-scale
lithium mine to be located approximately 210 km from the nation's
capital of Windhoek and 220 km
from the Port of Walvis Bay. The Company's Rubicon and Helikon
mines are located within a 301 km2 prospective land
package. The project site is accessible year-round by road and has
access to power, water, rail, port, airport and communication
infrastructure.
About AIP Asset Management
It is a well-recognized,
award-winning asset management firm. Most recently, it took
home the 2017 Hedge week Award for Best Macro Hedge Fund and in
2014, it was nominated for the Ernst and Young Entrepreneur of the
Year Award – the world's most prestigious business award for
entrepreneurs. Its core focus is to help clients, be they
institutions, hedge funds, mutual funds, family offices, or retail
investors, achieve their investment goals.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking information"
within the meaning of applicable securities laws. Generally, any
statements that are not historical facts may contain
forward-looking information, and 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 indicates that certain actions, events or results
"may", "could", "would", "might" or "will be" taken, "occur" or "be
achieved." Forward-looking information includes, but is not limited
to, statements and expectations regarding the closing of the
Offering and the timing thereof. Forward-looking information is
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking
information.
Although the Company has attempted to identify important
factors that cause results not to be as anticipated, estimated or
intended, there can be no assurance that such forward-looking
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. Forward-looking information is made
as of the date of this presentation and the Company does not
undertake to update or revise any forward-looking information this
is included herein, except in accordance with applicable securities
laws.
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
SOURCE Desert Lion Energy
