BMR:CC - Battery Mineral Resources Corp. Announces Financial Arrangements for the Restart of Production at Punitaqui
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Battery MineralResources Corp. ( TSXV: BMR ) ( OTCQB: BTRMF )(“ Battery ” or “ BMR ” or the “ Company ”)is pleased to announce that its wholly-owned subsidiary, ESI EnergyServices Inc. (“ ESI ”), has entered into an C$8,000,000credit agreement (the “ Credit Agreement ”) with FieraEnhanced Private Debt Fund (“ Fiera ”). ESI has drawn afirst advance of C$5,000,000 under the Credit Agreement and may,subject to the satisfaction of certain conditions, draw a secondadvance of up to C$3,000,000 before May 15, 2024.
The net proceeds of theCredit Agreement will be primarily distributed by ESI to the Companyfor use towards the restart of copper concentrate production at itsPunitaqui Project in Chile.
In this regard, personnel hiring for the resumption of fulloperations at Punitaqui remains on schedule. Mine maintenance at theSan Andres mine is nearly complete with mine maintenance at theCinabrio mine, the original mine which served to supply the Punitaquiplant with copper mineralised material for the 10+ years of prioroperations, is well underway. All activities in the mines and theplant which are aimed at full operational commissioning of the plantin the near term and plant start-up in Q2 of 2024 are also progressingwell.
Credit AgreementTerms
The loans advanced underthe Credit Agreement bear interest at a floating prime rate plus anapplicable margin and will mature on the third anniversary of theCredit Agreement. ESI is required to make monthly principal repaymentsbased on a seven-year amortization schedule. ESI anticipates servicingits payment obligations under the Credit Agreement out of operatingcash flows, including from operations of its wholly-owned subsidiary,Ozzie’s Inc. (“ Ozzie’s ”).
The obligations of ESI under the Credit Agreement have beenguaranteed by Ozzie’s and secured by all of the assets of ESI andOzzie’s. In addition, ESI’s direct parent, BMR Holdings Limitedhas provided a pledge of its shares in ESI. ESI and Ozzie’s holdzero percent of the Company’s mineral assets, operations or realproperty in Canada, the United States, South Korea, or Chile, meaningthat the security granted by ESI and Ozzie’s does not encumber theCompany’s mineral assets and operations, including the PunitaquiProject.
The Credit Agreementcontains customary representations and warranties, covenants andevents of default, including requirements that ESI maintain a minimumworking capital ratio, a minimum fixed coverage charge ratio and aminimum quarterly revenue level. A copy of the Credit Agreement willbe available on the Company’s SEDAR+ profile at www.sedarplus.ca .
Fiera is an arm’slength party from the Company and ESI and does not currently hold anyequity interest in the Company or any of its subsidiaries. The loansadvanced under the Credit Agreement are non-convertible into equity ofthe Company and no bonus securities were issued in connection with theCredit Agreement.
Draw onJavelin Facility
Inaddition, the Company announces that it has drawn US$5,000,000(approximately C$6,764,000) under its Copper Concentrate Prepayfacility with Javelin Global Commodities (“ Javelin ”). Thefacility was previously announced in the Company’s new release datedFebruary 12, 2024.
Debenture Offering
The Company is also pleased to announce a private placementoffering (the “ Private Placement ”) of unsecured convertibledebentures (the “ Debentures ”) for total gross proceeds ofup to US$400,000 (approximately C$541,120). The proceeds from theDebentures will be applied towards the restart of production at thePunitaqui Project, and for working capital.
The terms of theDebentures will be the same as the debentures which were issuedpursuant to the private placement previously announced by the Companyin its new releases dated October 17, 2023, October 19, 2023, November3, 2023, December 19, 2023, February 2, 2024, and February 16, 2024(the “ First Offering ”).
Specifically, the Debentures will mature on September 30, 2026(the “ Maturity Date ”) and will bear interest at 10% perannum, compounding annually on September 30 of each year, not inadvance. Interest accrued from the date of issuance and up to andincluding March 30, 2025, will be paid by way of issuance of commonshares of the Company. Interest accrued following March 30, 2025, willbe, at the option of the holder, paid either in cash or by way ofissuance of common shares of the Company. The issuance of commonshares as payment of interest will be at the then current market priceof the Company’s common shares at the date the interest becomespayable and will be subject to the prior acceptance of the TSX VentureExchange and applicable securities laws.
The holder of a Debenture may, at their option, at any timefrom the date that is four months and one day following the issuanceof such Debenture, and prior to the close of business on the businessday immediately preceding the Maturity Date, convert all, but not lessthan all, of the principal amount of such Debenture into common sharesof the Company at the conversion price of US$0.22 per share.
Weston Energy LLC II, afund operated by Yorktown Partners LLC, and an existing shareholder ofthe Company, has subscribed for US$300,000 (approximately C$405,840)in principal amount of Debentures in the Private Placement. TheDebenture financing is anticipated to close in two or moretranches.
Max Satel, CFOcommented: “With the Credit Agreement, the draw on the Javelinfacility, and the Private Placement, we’re pleased to have securedthe balance of the financing required to bring the Punitaqui Projectback into production, which we anticipate will occur in Q2 of 2024. Wewish to extend our gratitude to our stakeholders for their continuedsupport of Company.”
Finder’s Fees Pursuant to First Offering
Pursuant to the FirstOffering, the Company paid finder’s fees in the aggregate amount ofUS$36,000 (approximately C$48,701) to Odeon Capital Group, LLC.
Resignation of DerekWhite
Derek White has resignedas director of the Company effective as of March 11, 2024. The Companywishes to thank Mr. White for his guidance and support of the Companyduring his tenure as a director.
Exchange Rates
All USD amounts for which CAD equivalent amounts are given inthis news release were calculated at CAD/USD exchange rate of 1.3528,the exchange rate published by the Bank of Canada on March 6,2024.
About Battery MineralResources Corp.
BMR is a battery minerals company providing shareholdersexposure to the global mega-trend of electrification while beingfocused on growth through cash-flow, exploration, and acquisitions infavourable mining jurisdictions. BMR’s mission is the discovery,acquisition, and development of battery metals (namely cobalt,lithium, graphite, and copper), in North America, South America andSouth Korea and to become a premier and responsible supplier ofbattery minerals to the electrification marketplace. BMR is currentlypursuing a near-term resumption of operations of the Punitaqui MiningComplex, a past copper-gold-silver producer, in the Coquimbo region ofChile. BMR is the largest mineral claim holder in the historicGowganda Cobalt-Silver Camp in Ontario, Canada, and continues topursue a focused program to build on the recently announced,+1-million-pound high-grade cobalt resource at McAra. In addition,Battery Mineral owns 100% of ESI Energy Services, Inc. (includingESI’s wholly owned USA operating subsidiary, Ozzie’s, Inc.), aprofitable mainline pipeline and renewable energy equipment rental andsales company with operations in Alberta, Canada and Arizona, USA.Battery Mineral Resources is based in Canada and its shares are listedon the TSXV under the symbol “BMR” and on the OTCQB under thesymbol “BTRMF”. Further information about BMR and its projects canbe found on www.bmrcorp.com .
Neither the TSXVnor its Regulation Services Provider (as that term is defined in thepolicies of the TSXV) accepts responsibility for the adequacy oraccuracy of this press release. The completion of the PrivatePlacement and the transactions contemplated by the Credit Agreementare subject to the acceptance of the TSX Venture Exchange(“TSXV”).
Forward LookingStatements
This news releaseincludes certain “forward-looking statements” under applicablesecurities laws. There can be no assurance that such statements willprove to be accurate, and actual results and future events coulddiffer materially from those anticipated in such statements.Forward-looking statements reflect the beliefs, opinions andprojections of the Company on the date the statements are made and arebased upon a number of assumptions and estimates that, whileconsidered reasonable by the Company, are inherently subject tosignificant business, economic, competitive, political and socialuncertainties and contingencies. Many factors, both known and unknown,could cause actual results, performance, or achievements to bematerially different from the results, performance or achievementsthat are or may be expressed or implied by such forward-lookingstatements and the parties have made assumptions and estimates basedon or related to many of these factors. Such factors include, withoutlimitation, the ability of the Company to obtain sufficient financing(including through the Private Placement and additional draws underthe Credit Agreement and the arrangements with Javelin) to completeexploration and development activities, the ability of the Company toclose further tranches of the Private Placement and to access furtherdraws under the Credit Agreement and the arrangements with Javelin,the completion, timing and size of the proposed Private Placement, theintended use of the proceeds of the Private Placement and draws underthe Credit Agreement and the Javelin arrangements, risks related toshare price and market conditions, the inherent risks involved in themining, exploration and development of mineral properties, the abilityof the Company to meet its anticipated development schedule,government regulation and fluctuating metal prices. Accordingly,readers should not place undue reliance on forward-looking statements.Battery undertakes no obligation to update publicly or otherwiserevise any forward-looking statements contained herein, whether as aresult of new information or future events or otherwise, except as maybe required by law. For further information regarding the risks pleaserefer to the risk factors discussed in Battery’s most recentManagement Discussion and Analysis filed on SEDAR+.
ContactDetails
Battery Mineral Resources Corp.
MartinKostuik, CEO
+1 604-229-3830
CorporateCommunications, IBN (InvestorBrandNetwork)
+1310-299-1717
editor@investorbrandnetwork.com
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