SRGMF - SRG and C-ONE transaction update
(TheNewswire)
Montreal, Canada – TheNewswire - July 26, 2023 - SRG MiningInc. (TSXV:SRG) (“ SRG ” or the“ Company ” ) announced significant progress has been made towardsmeeting the closing conditions of the proposed private placement,announced on July 10, 2023, to Carbon ONE NewEnergy Group Co.,Ltd (“ C-ONE ”).
Under terms of a subscription agreement between theCompany and C-ONE, SRG will issue 28,222,380 common shares to C-ONE(or its designated affiliate) through a private placement at a priceof C$0.60 per share. The subscription amount is approximately C$16.9million (US$12.7 million) (the “ Subscription Amount ”). On closing, C-ONE will come to own 19.4% of SRG’sissued and outstanding common shares, establishing C-ONE as one ofSRG’s largest shareholders.
SRG’s current largest shareholder, La ManchaInvestments S.a.r.l. (“ LaMancha ”) will partially exercise itspre-existing anti-dilution right. Under terms of a separatesubscription agreement, dated July 25, 2023, between the Company andLa Mancha, SRG will issue 779,439 common shares to La Mancha (or itsdesignated affiliate) through a private placement at a price of C$0.60per share. The aggregate subscription amount of La Mancha’ssubscription is approximately C$0.5 million (US$0.3million) (the“ La Mancha Subscription Amount ”). La Mancha currently owns an aggregate of 27,442,941 SRGcommon shares representing approximately 24.1% of SRG’s issued andoutstanding common shares and following the subscription, and aftergiving effect to the C-ONE private placement, La Mancha will own anaggregate of 28,222,380 common shares of SRG representingapproximately 19.4% of SRG.
The transactions are subject to customary closingconditions which have all been met or waived other than delivery ofthe securities of SRG, as well as additional closing conditionsrelated to regulatory approvals, including approval by the Ministry ofCommerce (“ MOC ”) of the Peoples Republic of China, the NationalDevelopment and Reform Commission (“ NDRC ”) of thePeople’s Republic of China and State Administration of ForeignExchange (“ SAFE ”) of the Peoples Republic of China and under the Investment Canada Act.
C-ONE has provided evidence of the Subscription Amountbeing retained for the purpose of completing the placement uponreceipt of regulatory approval, and has provided an undertaking toretain the Subscription Amount with Bank of China until such time asMOC, NDRC and SAFE approvals have been obtained, following which C-ONEshall transfer the Subscription Amount in trust to an independentescrow agent for the purpose of completing the placement following thecompletion of the remaining regulatory approval process. La Mancha hassimilarly deposited the La Mancha Subscription Amount in an escrowaccount in anticipation of all closing conditions having been met orwaived.
Completion of the transaction is expected to occur byor in Q1 2024. The common shares will be subject to a four month andone day hold period from the date of their issuance in accordance withapplicable securities laws and the policies of the TSX VentureExchange.
La Mancha is holding SRG common shares for investmentpurposes and in the future, La Mancha may, from time to time, increaseor decrease its investments in SRG through market transactions, private arrangements, treasury issuances orotherwise. La Mancha is a wholly owned subsidiary of La ManchaResource Fund SCSp (formerly known as La Mancha Fund SCSp, the“ Fund ”).
The head office of La Mancha and the Fund is located at31-33 Avenue Pasteur L-2311 Luxembourg. SRG’s head office islocated at 1320 boul. Graham, Suite/bureau 132, Mont-Royal, Québec,H3P 3C8.
La Mancha will file an early warning report inaccordance with applicable securities laws, which will be availableunder SRG’s SEDAR profile at www.sedar.com , and may also be obtained by contacting: Karim Nasr,Partner, La Mancha Resource Capital LLP, karim.nasr@lamancha.com , +44.203.960.2020.
The La Mancha investment is a “related partytransaction” for purposes of Multilateral Instrument 61-101 –Protection of Minority Security Holders in Special Transactions (“MI61-101”). SRG is exempt from the formal valuation and minorityshareholder approval requirements of MI 61-101, respectively, inreliance on sections 5.5(a) and 5.7(b) of MI 61-101, respectively, asthe fair market value of the investment is not more than 25% ofSRG’s market capitalization.
About C-ONE
A leading private anode materials company in China,C-ONE was founded in 2022 by C-ONE’s Chair, Yue Min. Mr. Yue is aco-founder of BTR New Material Group Co., Ltd, the largest anodematerials company in the world, and is a pioneer in China’s graphiteand silicon-based anode industry. As a principal inventor, Mr. Yue isa leading authority with over 30 years of experience in anodematerials who has drafted numerous industry standards and has over 300battery-related patents in his name.
C-ONE has assembled a large production base for variousanode materials that sets the benchmark in the industry, includingnatural flake graphite. C-ONE is an innovative anode material industryleader and one of the lowest cost anode material producers in China,with a current installed capacity of 300,000 tonnes per annum(“ tpa ”) of CSPG .C-ONE owns several natural flake graphite mines that feed 250,000 tpaof spheroidizing capacity, 275,000 tpa ofchemical purification capacity and 100,000 tpa of thermal purificationcapacity as well as 300,000 tpa of ALD-like coating capacity.
In addition to natural flake graphite material, C-ONEhas the capacity to produce 150,000 tpa of artificial graphite andplanned production of 15,000 tpa of silicon-based products.
About SRG
SRG Mining is a Canadian-based mining company focusedon developing the Lola Graphite Project located in the Republic ofGuinea, West Africa. The Lola Graphite Project has Proven and Probable Reserves of 41Mt at a grade of 4.14%Cg . SRG aims to develop a fully integratedsource of battery anode material to supply the European and NorthAmerican lithium-ion and fuel cell markets. With attractive operatingcosts, proximity to European end-markets and strong ESG credentials,the Company is poised to become a reliable supplier while promotingsustainability and supply chain transparency. SRG is committed to generating sustainable, long-term benefits thatare shared with the host countries and communities where itoperates.
For additional information, please visit SRG’swebsite at www.srgmining.com .
Contact :
Matthieu Bos Matt Johnston
President & CEO CorporateDevelopment Advisor
Email: m.bos@srgmining.com Email: m.johnston@srgmining.com
Neither the TSXV nor its RegulationServices Provider (as that term is defined in the policies of theTSXV) accepts responsibility for the adequacy or accuracy of thisrelease.
This press releasecontains "forward-looking information" within the meaning ofCanadian securities legislation. All information contained herein thatis not clearly historical in nature may constitute forward-lookinginformation. Generally, such forward-looking information can beidentified by the use of forward-looking terminology such as“intends”, “accelerate”, advance”, “confident”,“aim”, “develop”, “expected”, “include”, “will”,“become”, “continue”, “deliver”, “believe”, orvariations of such words and phrases or state that certain actions,events or results "may", "could","would" or "might". Forward-looking information inthis news release includes receipt of regulatory approvals, completionof the private placement of C-ONE in the common shares of SRG, and theexercise of La Mancha’s anti-dilution rights. Forward-lookinginformation is subject to known and unknown risks, uncertainties andother factors that may cause the actual results, level of activity,performance or achievements of the Company to be materially differentfrom those expressed or implied by such forward-looking information,including but not limited to: (i) decision making processes byapplicable regulatory authorities in China and Canada; (ii) thegeneral global markets and economic conditions; (iii) the decisionmaking of third parties, including La Mancha; (iv) the continuation oftitle related to the Company’s mineral properties until the date ofclosing; (iv) the results of a national security review, if any,associated with the proposed investment; and other risks and factorsmore generally associated with the business of the Company, asdescribed or referred to in the section entitled "RiskFactors" in the MD&A of the Company and which is available atwww.sedar.com, all of which should be reviewed in conjunction with theinformation found in this news release.
Although the Company has attempted to identifyimportant factors that could cause actual results to differ materiallyfrom those contained in the forward-looking information, there may beother factors that cause results not to be as anticipated, estimatedor intended. There can be no assurance that such forward-lookinginformation will prove to be accurate, as actual results and futureevents could differ materially from those anticipated in suchforward-looking information. Such forward-looking information has beenprovided for the purpose of assisting investors in understanding theCompany's business, operations and exploration plans and may not beappropriate for other purposes. Accordingly, readers should not placeundue reliance on forward-looking information. Forward-lookinginformation is given as of the date of this press release, and theCompany does not undertake to update such forward-looking informationexcept in accordance with applicable securities laws.
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