VANCOUVER, BC, Feb. 13,
2024 /CNW/ - P2 Gold Inc. ("P2" or the
"Company") (TSXV: PGLD) (OTCQB: PGLDF) reports, subject to TSX
Venture Exchange (the "Exchange") approval, that it has reached an
agreement to settle the outstanding debt related to the acquisition
of the Gabbs Project and that it intends to complete a
concurrent non-brokered private placement of convertible debenture
units (the "Units") for up to $1.7
million (the "Offering").
Debt Settlement
In settling the debt, P2 has entered into a termination
agreement (the "Termination Agreement") with Waterton Nevada
Splitter, LLC ("Splitter"), an affiliate of Waterton Precious
Metals Fund II Cayman, LP pursuant to which P2 will issue or pay to
Splitter (a) US$1 million and
5,231,869 common shares in the capital of the Company ("Shares"),
following Exchange approval of the Termination Agreement and
Offering, (b) US$125,000 on or before
January 31, 2025, and (c) US$125,000
on or before January 31, 2026.
Splitter currently has beneficial ownership of, and control or
direction over, 18,320,534 Shares of the Company, representing
approximately 16.9% of the issued and outstanding Shares.
Following the issuance of 5,231,869 Shares to Waterton under
the Termination Agreement, Waterton will have beneficial ownership
of, and control or direction over, 23,552,403 Shares, representing
19.9% of the issued and outstanding Shares.
"The team at Waterton has been very supportive as we have worked
to advance Gabbs," commented Joe
Ovsenek, President and CEO of P2. "The removal of the
debt overhang on Gabbs will allow us to continue to move the
project forward and to pull back on the sale of a royalty in the
short term. Without the time constraints associated with the
debt payments, we can assess the best options for financing Gabbs
going forward as we optimize mine development."
Splitter is a "related party" of the Company. The issuance
of the Shares and cash payments to Splitter described above is
considered a related party transaction subject to Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions. The Company relied on exemptions from
the formal valuation and minority shareholder approval requirements
provided under sections 5.5(g) and 5.7(1)(e) of Multilateral
Instrument 61-101 on the basis that the debt settlement transaction
is intended to improve the Company's financial position.
The Offering
The Company expects to issue up to 1,700 Units at a price of
C$1,000 per Unit. Each Unit
will consist of one convertible debenture (a "Convertible
Debenture") with a principal amount of $1,000 and 12,500 Share purchase warrants
(the "Warrants").
The Convertible Debentures will bear interest at a rate of 7.5%,
payable semi-annually on the last day of June and December of each
year, commencing on June 30, 2024.
Interest will be paid in Shares based on the 15-day volume weighted
average price ("VWAP") of the Shares on the Exchange or cash, at
the Company's election, subject to Exchange approval. The
Convertible Debentures will have approximately a two-year term (the
"Term"), with the principal amount being due to be repaid in full
by the Company on January 31, 2026
(the "Maturity Date"). At any time during the Term, the
Company will have the option to extend the Term by up to one
additional year on payment of an extension fee to the holders of
the Convertible Debentures (the "Holders") in the amount of six
month's interest payable in Shares based on the 15-day VWAP or
cash, at the Company's election, subject to Exchange approval. The
Convertible Debentures are unsecured.
At any time during the Term, a Holder may elect to convert the
outstanding net principal amount, or any portion thereof, into
Shares at a conversion price of C$0.08 per Share up to January 31, 2025 and $0.10 per Share from February 1, 2025 up to January 31, 2026 (the "Conversion Price").
In the event the Company announces a business combination and
the 15-day VWAP of the Shares on the Exchange is greater than
$0.08, the Company will have the
right to require the Holders to convert the outstanding net
principal amount into Units at the Conversion Price by giving
notice to the Holders by news release or other form of notice
permitted by the Convertible Debentures that the Convertible
Debentures will convert on the closing of the business
combination.
Each Warrant shall entitle the holder thereof to acquire one
Share at an exercise price of $0.15,
for a period of 24 months (the "Expiry Time"), provided that, if
after the later of four months from the date of issue and
conversion, the closing price of the Shares on the Exchange is
equal to or greater than $0.30 for a
period of 10 consecutive trading days at any time prior to the
Expiry Time, the Company will have the right to accelerate the
Expiry Time by giving notice to the holders of the Warrants by news
release or other form of notice permitted by the certificate
representing the Warrants that the Warrants will expire at
4:30 p.m. (Vancouver time) on a date that is not less
than 15 days from the date notice is given.
The majority of the proceeds of the Offering will be used to
fund obligations under the Termination Agreement. The
Offering will close on completion of documentation and is
conditional upon receipt of all necessary regulatory approvals,
including the approval of the Exchange.
The Offering will be offered to accredited investors in all
Provinces of Canada pursuant to
applicable securities laws. In connection with the Offering,
the Company may pay finders' fees as permitted by the policies of
the Exchange. All securities issued pursuant to the Offering
and underlying securities will be subject to a four-month hold
period.
The securities to be offered in the Offering have not been, and
will not be, registered under the U.S. Securities Act of 1933, as
amended (the "U.S. Securities Act") or any U.S. state securities
laws, and may not be offered or sold in the United States or to, or for the account or
benefit of, United States persons
absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This news release shall not constitute
an offer to sell or the solicitation of an offer to buy securities
in the United States, nor shall
there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful.
Further to the Company's news release of February 2, 2024, the Company does not intend to
proceed with further tranches of the non-brokered private placement
announced on December 21, 2023 and
upsized on December 27, 2023.
Splitter Early Warning
Report
An early warning report will be filed by Splitter in accordance
with applicable securities laws. For further information or
to obtain a copy of the early warning report, please see the
Company's profile on SEDAR at www.sedar.com or contact
Richard Wells, Chief Financial
Officer of Waterton Global Resource Management, Inc., at
416-504-3505. The head office address of Splitter is c/o
Waterton Global Resource Management, Inc., 2 Bloor Street East,
Suite 1530, Toronto, ON, M4W
1A8.
Splitter has no current plan or future intentions which relate
to, or would result in, acquiring additional securities of P2 or
disposing of securities of P2. Depending on market
conditions, Splitter's view of P2's prospects, other investment
opportunities and other factors considered relevant by Splitter,
Splitter may acquire additional securities of P2 from time to time
in the future, in the open market or pursuant to privately
negotiated transactions, or may sell all or a portion of its
securities of P2.
About P2 Gold Inc.
P2 is a mineral exploration and development company focused on
advancing precious metals and copper discoveries and acquisitions
in the western United States and
British Columbia.
Neither the Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Forward Looking
Information
This press release contains "forward-looking information" within
the meaning of applicable securities laws that is intended to be
covered by the safe harbours created by those laws.
"Forward-looking information" includes statements that use
forward-looking terminology such as "may", "will", "expect",
"anticipate", "believe", "continue", "potential" or the negative
thereof or other variations thereof or comparable terminology. Such
forward-looking information includes, without limitation,
information with respect to the Company's expectations, strategies
and plans for exploration properties including the Company's
planned expenditures and exploration activities at the Gabbs
Project, the significance of the removal of the debt overhang as it
relates to the development of Gabbs, the completion of the
Offering, Exchange approval of the Offering and the Termination
Agreement, and the use of proceeds from the Offering.
Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions
of management at the date the statements are made, including
without limitation, that the Company will be able to use the
proceeds from the Offering as anticipated, that the Company will
receive Exchange approval for the Offering and Termination
Agreement, that the settlement of outstanding debt will allow the
Company to optimize mine development at Gabbs as well as the other
assumptions disclosed in this news release. Furthermore, such
forward-looking information involves a variety of known and unknown
risks, uncertainties and other factors which may cause the actual
plans, intentions, activities, results, performance or achievements
of the Company to be materially different from any future plans,
intentions, activities, results, performance or achievements
expressed or implied by such forward-looking information, including
without limitation, the inability to use the proceeds from the
Offering as expected, that the Company will not receive Exchange
approval for the Termination Agreement or the Offering, that the
settlement of outstanding debt will not allow for the optimization
of mine development at Gabbs and risks associated with mineral
exploration, including the risk that actual results and timing of
exploration and development will be different from those expected
by management. See "Risk Factors" in the Company's annual
information form dated March 16, 2023
filed on SEDAR+ at www.sedarplus.ca for a discussion of these
risks.
The Company cautions that there can be no assurance that
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such information. Accordingly, investors should not
place undue reliance on forward-looking information.
Except as required by law, the Company does not assume any
obligation to release publicly any revisions to forward-looking
information contained in this press release to reflect events or
circumstances after the date hereof.
SOURCE P2 Gold Inc.