Magna Mining closes $33.5 Million Private Placement for Sudbury project
Magna Mining Inc. has closed its previously announced "best efforts" private placement of: (i) $23,967,000 aggregate principal amount of unsecured convertible debentures of the Corporation (the "Convertible Debentures"), issued in ordinary multiples of $1,000, less an original issue discount of 2% of the face amount of the Convertible Debentures, for aggregate gross proceeds of $23,487,660; and (ii) an aggregate of 6,451,620 common shares of the Corporation (the "Offered Common Shares" and together with the Convertible Debentures, the "Offered Securities") at a price of $1.55 per Offered Common Share, for aggregate gross proceeds of $10,000,011 (collectively, the "Offering"). The Corporation intends to use the net proceeds from the sale of the Offering to advance its existing Sudbury projects and for general corporate and working capital purposes.
The principal amount of the Convertible Debentures bears interest at a fixed rate of 10.0% per annum, payable in cash quarterly in arrears and will mature on March 5, 2029 (the "Maturity Date"). The Convertible Debentures are governed by the terms and conditions of a debenture indenture dated as of March 5, 2025 between the Corporation and Computershare Trust Company of Canada, as debenture trustee (the "Debenture Indenture"). The principal amount of each Convertible Debenture will be convertible, at the election of the holder, into common shares of the Corporation ("Common Shares" and, the Common Shares issuable upon conversion of the Convertible Debentures, the "Conversion Shares") at a conversion price of $2.00 per Conversion Share (the "Conversion Price") at any time until the earlier of (i) the business day preceding the Maturity Date, and (ii) the date of repayment in full of the principal amount of the Convertible Debentures and all accrued and unpaid interest thereon.
If at any time following the two-year anniversary of the closing date of the Offering, the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the "Exchange") equals or exceeds 150% of the Conversion Price (subject to adjustment in accordance with the terms of the Debenture Indenture) for 20 consecutive trading days ("Trading Period"), the Corporation shall have the right to elect, at any time during the three trading days after such Trading Period, to have all of the principal amount outstanding under the Convertible Debentures converted into Conversion Shares at the Conversion Price.
The Offering was completed pursuant to the terms of an agency agreement dated as of March 5, 2025 among the Corporation and SCP Resource Finance LP and Desjardins Securities Inc., as co-lead agents, for and on behalf of a syndicate of agents that included Paradigm Capital Inc, Canaccord Genuity Corp. and BMO Nesbitt Burns Inc. (collectively, the "Agents"). In consideration for their services, the Corporation paid the Agents an aggregate $1,270,464.23 in cash, comprised of a cash commission of $1,229,814.14 and an advisory fee of $40,650.09.
The Offered Securities issued under the Offering are subject to a hold period expiring four months and one day from the date hereof. The Offering remains subject to the final acceptance of the Exchange.
In connection with the Offering, Dundee Corporation ("Dundee") exercised its participation right to subscribe for $8,000,000 aggregate principal amount of Convertible Debentures through its wholly owned subsidiary, Dundee Resources Limited, for an aggregate subscription amount of $7,840,000. Prior to the Offering, Dundee had beneficial ownership of, or control or direction over, directly or indirectly, 42,725,318 Common Shares and warrants exercisable to acquire 4,259,259 Common Shares (the "Warrants"), representing approximately 21.7% of the issued and outstanding Common Shares prior to the Offering on a non-diluted basis (or approximately 23.4% on a partially-diluted basis). Following closing of the Offering, Dundee has beneficial ownership of, or control or direction over, directly or indirectly 42,725,318 Common Shares, 4,259,259 Warrants and $8,000,000 aggregate principal amount of Convertible Debentures, representing approximately 21.0% of the issued and outstanding Common Shares immediately following the Offering on a non-diluted basis (or approximately 24.1% on a partially-diluted basis).
In addition, certain other insiders of the Corporation subscribed for a total of $3,650,00 aggregate principal amount of Convertible Debentures and 6,500 Offered Common Shares, for gross proceeds to the Corporation of $3,577,000 and $10,075, respectively.
Each subscription under the Offering by an insider (including Dundee) is considered to be a "related party transaction" for purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Corporation did not file a material change report more than 21 days before the expected closing date of the Offering as the details of the Offering and the participation therein by the insiders were not settled until shortly prior to the closing of the Offering, and the Corporation wished to close the Offering on an expedited basis for sound business reasons. The Corporation relied on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Corporation is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on section 5.5(b) of MI 61-101 as the Corporation is not listed or quoted on a specified market. Additionally, the Corporation is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(1)(a) of MI 61-101 as the fair market value of the transaction, insofar as it involves the insiders, was not more than the 25% of the Corporation's market capitalization.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
About Magna Mining Inc.
Magna is a producing mining company with a portfolio of copper, nickel and PGM operating, exploration and development projects in the Sudbury Region of Ontario, Canada. The Corporation's primary assets are the producing McCreedy West copper mine and the past producing Levack, Podolsky, Shakespeare and Crean Hill mines.
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