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TSX-V: JAG
TORONTO, Sept. 14, 2015 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Corporation") (TSX-V: JAG) announced today that
it intends to complete a non-brokered private placement (the
"Offering") of units ("Units") at a price of US$1,000 per Unit, with each Unit to be comprised
of US$1,000 principal amount of
senior secured notes of the Corporation (the "Notes") and
common share purchase warrants ("Warrants"), to be determined in
the context of the market, for aggregate proceeds of up to
US$20,000,000. The Notes will mature
on the day that is five years following the closing date of the
Offering (the "Closing Date") and will carry a 10% cash coupon and
a 5% payment-in-kind coupon (the "PIK Coupon") that will be
satisfied by the issuance of additional Notes, which coupons shall
be payable on a quarterly basis. Each Warrant will entitle the
holder thereof to acquire one common share of the Corporation (each
a "Common Share") at an exercise price to be determined in the
context of the market for a period of five years from the Closing
Date.
The Notes will not be redeemable before the day that is 12
months plus one day after the Closing Date (the "Call Date"). With
30 days written notice, on and after the Call Date and prior to the
maturity date of the Notes, the Notes will be redeemable in cash in
whole or in part from time to time at the Corporation's option at a
price of: (i) 110% of the principal amount of the Notes outstanding
within year one after the Call Date, (ii) 105% in year two after
the Call Date, and (iii) 101% thereafter, plus, in each case, any
accrued and unpaid interest thereon.
The Notes will be governed by an indenture containing provisions
and covenants including, but not limited to, restricted payments
and limitations on capital expenditures and further
indebtedness.
Pursuant to the Offering, certain insiders of Jaguar, namely
Outrider Management, LLC ("Outrider Management") and Dupont Capital
Management Corp. ("Dupont Capital"), have advised Jaguar that they
intend to subscribe for Units in the aggregate amounts of up to
US$6,500,000 and US$1,500,000, respectively.
The special committee of the board of directors of Jaguar, which
was established in December 2014 to
initiate a strategic review process and explore strategic
alternatives with the objective of maximizing value for the
Corporation's shareholders, unanimously passed a resolution
approving the Offering, which includes the proposed subscriptions
of Outrider Management (the "Outrider Subscription") and Dupont
Capital (the "Dupont Subscription").
Since Outrider Management and Dupont Capital are "related
parties" (within the meaning of Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("MI 61-101")), each of the Outrider Subscription
and the Dupont Subscription is a "related party transaction"
(within the meaning of MI 61-101), which would require Jaguar to
obtain a formal valuation for, and minority approval of, the
Outrider Subscription and the Dupont Subscription, in the absence
of exemptions for such requirements.
For both the Outrider Subscription and the Dupont Subscription,
the Corporation is exempt from the formal valuation requirement
pursuant to section 5.5(b) of MI 61-101 on the basis that no
securities of Jaguar are listed or quoted on a market specified in
that provision.
With respect to the Dupont Subscription, the Corporation is
exempt from the minority approval requirement pursuant to section
5.7(b) of MI 61-101 on the basis that neither the fair market value
of the Units being distributed to Dupont Capital, nor the
consideration to be received by the Corporation for those Units,
exceeds C$2,500,000, in addition to
satisfying the other criteria therein. With respect to the Outrider
Subscription, Jaguar intends to apply to the Ontario Securities
Commission and the TSX Venture Exchange for an exemption to allow
it to obtain the requisite minority approval by way of written
approval from the majority of the minority shareholders rather than
by holding a shareholders' meeting. This exemption is being sought
on the basis that holding a shareholders' meeting is costly and
would delay the closing of the Offering. Jaguar anticipates
obtaining such exemptive relief prior, and as a condition
precedent, to closing the Offering.
The Offering is expected to close on or about October 8, 2015. Completion of the Offering is
subject to a number of conditions including receiving the approval
of the TSX Venture Exchange, obtaining the exemptive relief from
the Ontario Securities Commission and the TSX Venture Exchange and
obtaining written consents from a majority of the disinterested
minority shareholders.
Jaguar does not intend to list the Units, the Notes or the
Warrants on the TSX Venture Exchange. The Notes, the Warrants and
the Common Shares underlying the Warrants will be subject to a four
month hold period pursuant to applicable Canadian securities
laws.
The Corporation plans to use the net proceeds of the Offering to
repay in full the outstanding US$8.4
million credit facility held by Renvest Global Resources
Fund c/o Renvest Mercantile Bancorp Inc. (the "Renvest Credit
Facility"), with the remainder to be used for general corporate
purposes and to advance asset optimization plans in conjunction
with the Corporation's ongoing development and producing activities
at its assets in Brazil.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
About Jaguar Mining Inc.
Jaguar is a gold producer with mining operations in a prolific
greenstone belt in the state of Minas Gerais, Brazil. Additionally, Jaguar wholly owns the
large-scale Gurupi Development Project in the state of Maranhão,
Brazil. In total, the Corporation
owns mineral claims covering an area of approximately 197,000
hectares. Additional information is available on the Corporation's
website at www.jaguarmining.com.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release constitute
"Forward-Looking Statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation. Such statements constitute forward-looking
statements (forecasts) under applicable securities laws relating to
future events or future performance and, in this news release,
include comments with respect to (i) the final terms of the Units,
the Notes, the Warrants and the Offering, (ii) the participation of
Outrider Management and Dupont Capital in the Offering, (iii) the
size of the Offering and the subscription amounts of Outrider
Management and Dupont Capital, (iv) regulatory approvals being
obtained, including from the Ontario Securities Commission and the
TSX Venture Exchange, and the timing of such approvals, (v) there
being an exemption from the minority approval and formal valuation
requirements under the Offering, (vi) the consent of disinterested
minority shareholders being obtained in writing with respect to the
Outrider Subscription, (vii) exemptive relief from the minority
approval requirement with respect to the Outrider Subscription
being obtained from the Ontario Securities Commission and the TSX
Venture Exchange, and the timing of such approvals, (viii) the
Corporation's use of the net proceeds of the Offering, and (ix) the
continued support of the Offering by the special committee of
Jaguar. Forward-looking statements can generally be identified by
the use of words such as "expected", "forecasted", "targeted",
"approximately", "intends", "plans", "anticipates", "projects",
"continue", "estimate", "believe" or variations of such words and
phrases, or statements that certain actions, events or results
"may", "could", "would", "might", or "will" be taken, occur or be
achieved. In this news release, information contained in
forward-looking statements is based on current expectations,
estimates and projections that involve a number of known and
unknown risks and uncertainties, including among others the
uncertainties inherent to capital markets in general, uncertainties
with respect to the success of the Offering, risk of not obtaining
all regulatory and minority shareholder approvals and the risks
with respect to the use of proceeds, which, if incorrect, may cause
actual results to differ materially from those anticipated by
Jaguar and described herein.
For additional information with respect to these and other
factors and assumptions underlying the forward-looking statements
made in this news release, see Corporation's most recent annual
information form and management's discussion and analysis, as well
as other public disclosure documents that can be accessed under the
issuer profile of "Jaguar Mining Inc." on SEDAR at www.sedar.com.
The forward-looking information set forth herein reflects Jaguar's
expectations as at the date of this news release and is subject to
change after such date. The Corporation disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
other than as required by law. The forward-looking information
contained in this news release is expressly qualified by this
cautionary statement.
The TSX Venture Exchange does not accept responsibility for
the adequacy or the accuracy of this release.
SOURCE Jaguar Mining Inc.