Northern Vertex Closes $7.2 Million Convertible Debenture Financing

Northern Vertex Mining Corp (TSXV:NEE) has closed the initial tranche of a non-brokered private-placement financing to raise gross proceeds of $7,225,000 through the issuance of unsecured convertible debentures. The proceeds from the debenture issuance will be used for the advancement of the company’s Moss mine gold-silver property located in Mohave county, northwest Arizona, United States, and general corporate purposes.
Dick Whittington, the company’s chief executive officer and president, commented, “This is a significant vote of confidence in the development plan of the Moss mine and the state of Arizona. This financing, along with the recently announced Macquarie Bank credit approval, brings the company closer to the initiation of final development and construction planning for the Moss mine.”
The terms of the debentures remain substantially as announced on May 25 and July 8, 2016. Each Debenture has an issue price of Cdn$100, matures on May 30, 2021, bears interest at 5% per annum, payable on May 30 and November 30 of each year while outstanding, which interest, subject to regulatory approval, may at the option of the Company be settled in common shares. The Debentures are convertible into common shares (“Conversion Shares”) of the Company at the price of Cdn $0.50 per Conversion Share (the “Conversion Price”). The Debentures and, if issued within four months of the date of issue of the Debentures, the Conversion Shares, will be subject to a four month hold period from the date of issuance of the Debentures in accordance with applicable securities laws. Aggregate finders’ fees of $430,500 payable in cash and 516,600 finders’ warrants were issued on this tranche to parties at arm’s length. Each finders’ warrant will entitle the holder to acquire one common share of the Company at an exercise price of $0.50 until July 14, 2019.
Each Debenture is convertible into common shares at the option of the holder at any time prior to the date fixed for redemption or maturity (as the case may be), at the Conversion Price, which is equivalent to 2,000 common shares for each Cdn$1,000 principal amount of Debentures, subject to adjustment in certain circumstances. Debentures must be converted in minimum amounts of Cdn$1,000.
The Company may redeem the Debentures in cash on or after May 31, 2018, in whole or in part from time to time, upon required prior notice at a redemption price equal to their principal amount plus accrued and unpaid interest, if any, provided that the trading price of the common shares for the 20 consecutive trading days ending five trading days prior to the date of the redemption notice must be less than the Conversion Price.
Additionally, the Company has the option, to repay the principal amount of the Debentures in common shares, provided certain circumstances are met including but not limited to; no default has occurred and is continuing at such time, and the trading price of the common shares for the 20 consecutive trading days ending five trading days prior to the date of the redemption notice or maturity date (as the case may be) is at least 150% of the Conversion Price.
The Company shall use its reasonable commercial efforts to list the Debentures on the TSX Venture Exchange following the expiry of the four-month hold period applicable under Canadian securities laws, which listing is subject to compliance with applicable TSX Venture Exchange policies. Once listed, the Debentures (and the common shares issued upon conversion of the underlying such Debentures) shall be freely tradable under applicable Canadian securities laws without notice to the Company.
The Company intends to complete one or more additional tranches of the Private Placement on or before August 5, 2016.
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