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Colt Resources (TSXV:GTP) has entered an agreement with CITC-GEM, whereby it has the option to issue and sell shares at its sole discretion and CITC-GEM is committed to buying common shares of Colt for aggregate proceeds of up to $30 million. Funds raised will be used to assist in the implementation of Colt’s growth strategy.
As quoted in the press release:
CRME is focused on securing and developing world class mining opportunities in the Greater Middle East and South Asia regions. CRME primary area of interest is Greater Balochistan known for its copper, gold and rare earth potential.
In accordance with the terms of the Agreement, Colt will have the right, from time to time during a period of up to 36 months from the execution date of the Agreement, to issue and sell to CITIC-GEM Fund, and CITIC-GEM Fund undertakes to acquire from Colt, Common Shares for a maximum aggregate consideration of $30,000,000 (the “Commitment Amount”) upon exercise by Colt of a draw down (each, a “Draw Down”).
Colt will control the timing and maximum amount of any Draw Down, and has the right, not the obligation, to draw down on the Commitment Amount. The maximum amount of a Draw Down will be the lesser of (i) 1,000% of the average daily trading volume during the 15 trading days immediately preceding the date of a Draw Down; or (ii) the remaining portion of the Commitment Amount. The Common Shares issued under the Agreement will be subject to statutory resale restrictions, but CITIC-GEM Fund will receive freely transferable and unrestricted Common Shares through a share lending facility which will be provided by Colt’s current shareholders.
Colt has also agreed to pay in connection with the Agreement up to 2% of the Commitment Amount in fee to CITIC-GEM Fund (the “Fee”).
The subscription price for the Common Shares issued under the Agreement will be equal to 90% of the average closing price of the 15 trading days immediately preceding the date of a Draw Down, which subscription price may not be lower than the floor price determined by Colt for such Draw Down and the Discounted Market Price (as such term is defined in the TSXV’s Corporate Finance Manual). The Agreement remains subject to the approval of the TSV Venture Exchange. A copy of the Agreement will be available electronically at www.sedar.com.
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