Home > News > KWG advances rail...

KWG advances rail agreements and issues ferrochrome warrants

Jan 4, 2022

KWG Resources Inc. and its subsidiary, Canada Chrome Corporation, are pleased to announce that, in accordance with the provisions of the agreements entered into with Rail-Veyor Technologies Global Inc. and Cormorant Utility Services Limited, each of Rail-Veyor and Cormorant acquired common shares of CCC in payment of fees of $1,538,460 and $2,400,000, respectively, for their respective engineering and design services, following which each of them exercised their exchange privilege and tendered their common shares of CCC as payment for the acquisition of 580,551 multiple voting shares of KWG ("KWG.A Shares") and 905,660 KWG.A Shares, respectively, for an aggregate of 1,486,211 KWG.A Shares, at a price of $2.65 per share for an aggregate value of $3,938,460.

KWG has also annunced that it has completed the issuance of ferrochrome warrants of the Company ("Ferrochrome Warrants") to those (the "Debentureholders") who held $3,879,956 of convertible debentures (the "Convertible Debentures") which had been issued in 2017 and 2018 and whose December 2019 maturity dates were extended in December 2019 to March 26 and March 31, 2021. As consideration for extending the maturity dates, the Company agreed to issue to each holder of Convertible Debentures one Ferrochrome Warrant for each $35 of principal amount of Convertible Debentures then outstanding (see KWG news releases dated December 9, 2019 and December 20, 2019).

Each Ferrochrome Warrant entitles the holder to acquire, for no additional consideration, one (1) ton of Ferrochrome, on a first-come first-served aliquot basis among all warrant holders, if, as and when such Ferrochrome is produced from an allocation of one percent (1.0%) of the mineral products produced from the Company's interest in the Black Horse Property in northern Ontario. 

On March 31, 2021, Convertible Debentures with an aggregate principal amount of $3,379,956 were converted into KWG multiple voting shares and share purchase warrants (see KWG news release dated April 1, 2021), leaving a Convertible Debenture with an original principal amount of $500,000 outstanding. To fulfill its outstanding obligation to the Debentureholders, the Company issued 111,570 Ferrochrome Warrants on December 30, 2021 in accordance with section 2.42 of National Instrument 54-106. 

In connection with the creation of the Ferrochrome Warrants, the Company proposes to enter into a trust indenture with a trust company to administer Ferrochrome Warrants and has undertaken to provide a security interest in its interest in the Black Horse Property to back the obligation for future delivery of Ferrochrome upon exercise of Ferrochrome Warrants.

Tags: Northern Ontario / Ring of Fire / Battery Metals / All Articles