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KWG looking to raise $3Million

Apr 29, 2020

KWG Resources Inc. will seek regulatory approval for the debenture issue after filing of the audited financial statements, of $3 million of Convertible Debentures to be pari passu with previously-issued debentures maturing March 31, 2021. Within that time all or part of the sum secured by the debentures are convertible at the option of the Company into units with a deemed value of $21 per unit (each a "Unit"). Each Unit is comprised of four (4) KWG.A multiple voting shares and four (4) multiple voting share purchase warrants, with each such warrant enabling its holder to acquire one further KWG.A multiple voting share from treasury upon payment of $7.50 at any time within two years from the date of its issuance. The debentures bear interest at a rate of 12% per annum, accruing daily, compounding annually and payable at the earlier of maturity, redemption or conversion, in KWG.A multiple voting shares from treasury at their volume-weighted average price for the ten trading days prior to payment. 

For each $35.00 principal amount of Convertible Debentures, the Debenture-holder will also receive Delivery Warrants exchangeable on a first-come aliquot basis for one ton of warehoused ferrochrome. The terms of the Delivery Warrants will provide that they may be tendered by their holders to receive ferrochrome from 1% of any future ferrochrome production from the Company's chromite mineral interests, if and when produced. The Company intends to set a ferrochrome delivery standard for ferrochrome after processing to be approximately 52% chrome content with carbon of 6% - 8%, silica not exceeding 1.5% and the remaining fraction being principally iron. The Company proposes to list the Delivery Warrants for trading on the Canadian Securities Exchange (the "CSE") which, if implemented, could provide a liquid market for ferrochrome price hedging. 

In connection with the creation of the Delivery Warrants, the Company will undertake to provide a security interest in its chromite mineral title to back the obligation for future delivery and will also undertake that, should production of ferrochrome ensue in future from minerals recovered from those mineral claims, 1% of all such production will be warehoused on an ongoing basis to provide stocks of ferrochrome for delivery to warrant-holders wishing to take delivery of ferrochrome in exchange for tender and cancellation of their corresponding Delivery Warrants.

KWG is a mineral exploration company with mineral exploration claims in the Ring of Fire area of northwestern Ontario. The Company does not currently have any reserves (within the meaning of National Instrument 43-101) of chromite inasmuch as its mineral interests there are all in the categories of measured, indicated and inferred resources and there is no assurance that the Company will ever produce ferrochrome or chrome. KWG has a 30% joint venture interest in the Big Daddy deposit which contains NI 43-101 measured and indicated resources of 29.1 million Tonnes of 31.7% chrome oxide and inferred resources of 3.4 million Tonnes of 28.1% chrome oxide. The Company has a 50% interest in the Black Horse deposit which contains NI 43-101 inferred resources of 85.9 million Tonnes of 34.5% chrome oxide.

KWG also announces that due to circumstances created by the COVID-19 pandemic, the Ontario Securities Commission and other members of the Canadian Securities Administrators granted "Issuers" in the Canadian securities industry up to an additional 45 days, to complete year-end statutory filings (the "Extension"). The Company does not believe that it will be able to file its December 31, 2019 audited annual financial statements by its usual 120-day deadline of April 29, 2020, and will be relying on the Extension. Accordingly, as required by the conditions of the Extension, the Company's management and other insiders will be subject to a trading black-out that reflects the principles in Section 9 of National Policy 11-207 until its financial statements are filed, which will be by June 13, 2020. Other than as previously disclosed by the Company in news releases, including the information herein, there are no other material business developments since the date of the Company's most recent filing of its interim financial statements and management discussion and analysis for its Q3 ended September 30, 2019. The Company will be providing an update news release on the status of filing its December 31, 2019 audited financial statements by May 29, 2020.

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