/NOT FOR DISTRIBUTION IN THE UNITED
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THE UNITED STATES/
TSX-V: JAG
TORONTO, Oct. 28, 2015 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Corporation") (TSX-V: JAG) is pleased to announce
an over-subscribed closing of its previously announced non-brokered
private placement (the "Offering") of convertible senior secured
debentures ("Debentures"). Pursuant to the Offering, the
Corporation raised aggregate gross proceeds of US$21,500,000, of which approximately
US$8.4 million were paid to Renvest
Global Resources Fund c/o Renvest Mercantile Bancorp Inc. to
transfer its interest in its credit facility with the Corporation
to the investors in the Offering, which facility was amended and
restated under the indenture governing the Debentures. The
Corporation plans to use the remainder of the proceeds of the
Offering for general corporate purposes and to advance asset
optimization plans in conjunction with the Corporation's ongoing
development and production activities at its Brazilian mines.
The Debentures bear interest at a rate of 12% per annum, payable
in cash on a quarterly basis and are convertible at the holder's
option into common shares of the Corporation ("Common Shares") at a
price of C$0.15 per Common Share (the
"Conversion Price"), being a ratio of approximately 8,781 Common
Shares per US$1,000 principal amount
of Debentures, based on an exchange rate of US$0.7592 per C$1.00. The Debentures mature on October 27, 2018.
The Debentures will not be redeemable before the day that is 12
months plus one day after the closing date of the Offering (the
"Call Date"). With 30 days written notice, on and after the
Call Date and prior to the maturity date of the Debentures, the
Debentures will be redeemable in cash in whole or in part from time
to time at the Corporation's option at a price of: (i) 120% of the
principal amount of the Debentures outstanding within year one
after the Call Date, and (ii) 110% thereafter, plus, in each case,
any accrued and unpaid interest thereon.
The Debentures are governed by an indenture containing
provisions and covenants including, but not limited to, further
indebtedness and restricted payments. A copy of the indenture will
be filed by the Corporation on SEDAR and will be available for
review under the Corporation's issuer profile on SEDAR at
www.sedar.com.
Pursuant to the Offering, certain insiders of Jaguar, namely
Outrider Management, LLC ("Outrider Management") and Dupont Capital
Management Corp. ("Dupont Capital"), subscribed for Debentures in
the aggregate principal amounts of US$5,350,000 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, including the 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 was a "related party transaction"
(within the meaning of MI 61-101), which would have required 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 was 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 was
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 Debentures being distributed to Dupont Capital, nor the
consideration to be received by the Corporation for those
Debentures, exceeded C$2,500,000, in
addition to satisfying the other criteria therein. With respect to
the Outrider Subscription, Jaguar applied to the Ontario Securities
Commission and the TSX Venture Exchange (the "TSXV") 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 was sought on the basis that holding a shareholders'
meeting is costly and would delay the closing of the Offering.
Jaguar obtained exemptive relief from the Ontario Securities
Commission in respect of the minority approval requirements and
obtained the consent of a majority of the disinterested
shareholders of the Corporation by way of written consent.
Further to the Corporation's news releases dated October 14, 2015 and October 20, 2015, the Corporation also obtained
the approval of the majority of the disinterested shareholders of
the Corporation in respect of subscriptions by two subscribers who,
upon conversion of the Debentures they purchased under the
Offering, could become "control persons" of the Corporation, within
the meaning of the Corporate Finance Manual of the TSXV. The
Corporation obtained such shareholder approvals by way of written
consent in accordance with the policies of the TSXV.
In connection with the Offering, the Corporation paid a cash
finder's fee to Origin Merchant Securities Inc. and Pollitt &
Co. Inc. of 3.5% of the total proceeds raised in the Offering from
subscriptions from purchasers introduced to the Offering, and
finder warrants ("Finder Warrants") to purchase such number of
Common Shares as is equal to up to 3.5% of the total number of
Common Shares issuable on conversion of the Debentures issued to
purchasers introduced to the Offering. The Finder Warrants have an
exercise price of $0.15 per Common
Share and expire on October 27, 2018.
An aggregate of 6,607,833 Finder Warrants were issued in connection
with the Offering.
The Debentures, the Common Shares underlying the Debentures and
the Finder Warrants are subject to a four month hold period
pursuant to applicable Canadian securities laws.
DuPont Early Warning Disclosure
On October 27, 2015, DuPont
Pension Trust ("DuPont") acquired ownership and control of
US$1,500,000 principal amount of
Debentures, which are convertible into Common Shares at the
Conversion Price.
DuPont has advised Jaguar that, at present, it also owns and
controls 12,037,763 Common Shares, representing approximately 10.8%
of the currently issued and outstanding Common Shares (being
111,136,038 Common Shares).
In the event that all Debentures owned by DuPont were converted
(and assuming an exchange rate of US$1 – C$0.7592),
DuPont would have ownership and control of an additional 13,171,760
Common Shares, representing approximately 10.6% of the currently
issued and outstanding Common Shares post-exercise, and ownership
and control over a total of 25,209,523 Common Shares, representing
approximately 20.3% of the currently issued and outstanding Common
Shares post-exercise on a partially diluted basis.
DuPont has advised Jaguar that it acquired the Debentures for
investment purposes and has no present intention to acquire further
securities of Jaguar, although it may in the future acquire or
dispose of securities of Jaguar, through the market, privately or
otherwise, as circumstances or market conditions warrant.
A copy of the early warning report required to be filed by
DuPont with applicable securities commissions in connection with
this acquisition will be filed under Jaguar's profile on SEDAR at
www.sedar.com and a copy of the early warning report may also be
obtained by contacting William
Flores, the Head of Compliance of DuPont, at 1 Righter
Parkway, Suite 3200, Wilmington,
DE, 19803, telephone: (302) 477-6099.
Outrider Early Warning Disclosure
On October 27, 2015, Outrider
Master Fund, LP ("Outrider") acquired ownership and control of
US$5,350,000 principal amount of
Debentures, which are convertible into Common Shares at the
Conversion Price.
Outrider has advised Jaguar that, at present, it also owns and
controls 36,045,291 Common Shares, representing approximately 32.4%
of the currently issued and outstanding Common Shares (being
111,136,038 Common Shares).
In the event that all Debentures owned by Outrider were
converted (and assuming an exchange rate of US$1 – C$0.7592),
Outrider would have ownership and control of an additional
46,979,276 Common Shares, representing approximately 29.7% of the
currently issued and outstanding Common Shares post-exercise, and
ownership and control over a total of 83,024,567 Common Shares,
representing approximately 52.5% of the currently issued and
outstanding Common Shares post-exercise on a partially diluted
basis.
Outrider has advised Jaguar that it acquired the Debentures for
investment purposes and has no present intention to acquire further
securities of Jaguar, although it may in the future acquire or
dispose of securities of Jaguar, through the market, privately or
otherwise, as circumstances or market conditions warrant.
A copy of the early warning report required to be filed by
Outrider with applicable securities commissions in connection with
this acquisition will be filed under Jaguar's profile on SEDAR at
http://www.sedar.com and a copy of the early warning report
may also be obtained by contacting Julia
Ruthven, the Chief Financial Officer of Outrider, at 1001
Bayhill Drive, Suite 125, San Bruno,
CA, 94066, telephone: (650) 238-5850.
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, but are not limited to, comments with respect to (i) the
Debentures and the Offering, and (ii) the expected use of proceeds
of the Offering. 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, 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.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Jaguar Mining Inc.