Colt completes an initial closing of its Senior Note Financing
Trading Symbols:
GTP - (TSX-V)
P01 - (FRANKFURT)
COLTF - (OTCQX)
NOT FOR RELEASE IN THE UNITED STATES OF AMERICA
MONTREAL, Nov. 4, 2013 /CNW Telbec/ - Colt Resources Inc. ("Colt" or the "Company") (TSXV: GTP) (FRA: P01) (OTCQX: COLTF) is pleased to announce that it has completed an initial closing of US$2.5 Million of its Senior Note Financing previously announced on July 4th, 2013 (the "Offering"). The Offering is managed by TerraNova Capital Partners, Inc. and offered through its broker/dealer subsidiary TerraNova Capital Equities, Inc. (collectively, "TerraNova").
The Offering resulted in the issuance and sale of ten units consisting of senior notes and warrants (the "Units"). Each Unit consists of US$250,000 in principal amount of 10% Secured Senior Notes (the "Notes") and common share purchase warrants (the "Warrants") to purchase up to 555,555 common shares of the Company (the "Common Shares"). The Warrants entitle their holders to purchase an aggregate of 5,550,000 Common Shares at an exercise price of US$0.45 per Common Share on or before November 1st, 2018. The Warrants are subject, at the Company's discretion, to an accelerated exercise after six months following the last closing of the Offering, if the VWAP of the Common Shares is equal to or greater than US$0.90 for a period of 30 days.
The terms of the Notes are fully disclosed in the Company's news release dated July 4th, 2013.
Richard Quesnel, the Company's Executive Chairman, has subscribed for eight Units, resulting in US$2.0 Million in principal amount of Notes and Warrants to purchase 4,444,444 Common Shares. He does not currently own or exercise control or direction, directly or indirectly, over any Common Shares of the Company.
In connection with the Offering, and in addition to a finders' fee, TerraNova will receive Common Share purchase warrants entitling it to purchase 111,111 Common Shares at an exercise price of US$0.45 per Common Share on or before November 1st, 2016.
The securities issued and sold under the Offering are subject to a four month hold period in accordance with applicable Canadian securities laws.
The participation of Mr. Quesnel in the Offering constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("Multilateral Instrument 61-101") and Policy 5.9 - Protection of Minority Security Holders in Special Transactions of the TSX Venture Exchange. In connection with this related party transaction, the Company is relying on the formal valuation and minority approval exemptions of respectively subsection 5.5(a) and 5.7(1)(a) of Multilateral Instrument 61-101 as the fair market value of the portion of the Offering subscribed by Mr. Quesnel does not exceed 25% of the Company's market capitalization. The Offering, including his participation therein, has been unanimously approved by the directors of the Company, with Mr. Quesnel abstaining.
A material change report in respect of this Offering (including the participation of Mr. Quesnel therein) will be filed by the Company but could not be filed earlier than 21 days prior to the initial closing of the Offering due to the fact that the participation of Mr. Quesnel in the Offering was not known to the Company at that time.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States unless an exemption from such registration is available.
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