Saint Jean Carbon Announces $14.0 Million Convertible Debenture
With Pala Investments
OAKVILLE, ONTARIO--(Marketwired - May 1, 2014) - Saint Jean
Carbon Inc. ("Saint Jean" or the "Company") (TSX-VENTURE:SJL) is
pleased to announce that it has signed a letter agreement ("Letter
Agreement") with Pala Investments Limited ("Pala") pursuant to
which the Company intends to complete a non-brokered $14,000,000
convertible debenture private placement ("Convertible Debenture
Financing") and a $600,000 bridge loan ("Bridge Loan
Financing").
Paul Ogilvie CEO, commented; "We are very pleased by the support
of Pala. The financing will help to ensure that Saint Jean is fully
funded to close property transactions and from there we can start
work on the properties, with a goal to move closer to future
production. We look forward to providing our shareholders with a
full project development time line in the coming months."
Convertible Debenture Financing
Pala has committed to subscribe for up to $14.0 million of a
secured convertible debenture to be issued by Saint Jean, subject
to completion of satisfactory due diligence on the Company by Pala,
certain other conditions as described below and the approval of the
TSX Venture Exchange. The convertible debenture will have an annual
coupon of 12%, a term of 3 years and an initial conversion price of
$0.045 per share (subject to upward adjustment upon completion of
the Share Consolidation as described below). The closing of
Convertible Debenture Financing shall be subject to the following
conditions:
- successful completion of a share consolidation of the Company,
if required by the TSX Venture Exchange, at a ratio that will
result in the adjusted conversion price, post-consolidation, being
not less than $0.10 per share thereafter (or such other minimum
price required by the TSX Venture Exchange) and otherwise in
compliance with the rules and policies of the TSX Venture Exchange
(the "Share Consolidation");
- successful completion of the acquisition of the Sri Lankan
graphite project from Han Tal Graphite (Pvt) Ltd. on the terms
announced by the Company on October 17, 2013 (the "Han Tal
Transaction");
- prior approval by the TSX Venture Exchange and the shareholders
of the Company of Pala as a Control Person of the Company;
- appointment of three Pala representatives to the Company's
board of directors; and
- satisfaction of customary conditions for a financing of this
type.
Upon successful completion of the Convertible Debenture
Financing, the Company shall pay Pala a 2% arrangement fee on the
entire principal amount along with a 1% standby fee for any undrawn
portion of the principal amount. Should the Convertible Debenture
Financing not close, the Company shall be obligated to pay Pala a
break fee in the amount $500,000 in certain instances.
The Company intends to close the Convertible Debenture Financing
as soon as is practicable. The proceeds of the Convertible
Debenture Financing shall be used to fund the development of the
property which is the subject of the Han Tal Transaction and for
general working capital purposes.
Bridge Loan Financing
Pala has also committed to provide Saint Jean with a $600,000
term loan bearing an interest rate of 18% per annum, which will
loan will be secured as first charge against all of the assets of
the Company. Subject to completion of satisfactory due diligence on
the Company by Pala and regulatory approval, the Company
anticipates receiving the term loan proceeds on or before May 31,
2014. Saint Jean intends to use the proceeds of the term loan to
complete the Han Tal Transaction.
About Pala
Pala Investments is an investment company focused exclusively on
the mining sector with a strong track record of successful
investments and value creation. Pala's team has extensive
experience within the sector and seeks to assist companies in which
it has long-term shareholdings by providing strategic advice and
innovative solutions in development, production, turnaround and
advanced exploration situations. Pala invests across all
geographies and in all mining commodities as well as mining
services and consumables. For more information, visit
www.pala.com.
About Saint Jean
Saint Jean is a publicly traded junior mining exploration
company with a number of graphite mining claims on three 100% owned
properties of the Company located in the province of Quebec in
Canada. The three properties include the Walker property, a past
producing mine, the Wallingford property and the St. Jovite
property. The Company is led by a management team with in-depth
experience in the graphite sector. For information on Saint Jean's
other 4 properties and the latest news please go to the website
www.saintjeancarbon.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FORWARD LOOKING STATEMENTS: This news release
contains forward-looking statements, within the meaning of
applicable securities legislation, concerning Saint Jean's business
and affairs. In certain cases, forward-looking statements can be
identified by the use of words such as "plans", "expects" or "does
not expect", "intends" "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved". Such forward-looking statements include those with
respect the Company's ability to complete the Convertible Debenture
Financing, the Bridge Loan Financing, the Han Tal Transaction and
become a graphite producing company.
These forward-looking statements are based on current
expectations, and are naturally subject to uncertainty and changes
in circumstances that may cause actual results to differ
materially. The forward-looking statements in this news release
assume, inter alia, that the conditions for completion of this
Convertible Debenture Financing, the Bridge Loan Financing, the Han
Tal Transaction, including regulatory approval and shareholder
approval, if necessary, will be met.
Although Saint Jean believes that the expectations
represented in such forward-looking statements are reasonable,
there can be no assurance that these expectations will prove to be
correct. There are risks which could affect Saint Jean's ability to
complete the Convertible Debenture Financing, the Bridge Loan
Financing, the Han Tal Transaction, and the future results of the
Company which could cause actual results to differ materially from
those expressed in these forward-looking statements including
negotiation failure or delay, the impact of general global economic
conditions and the risk that they will deteriorate, industry
conditions, including fluctuations in the price of supplies and the
risk that they will increase, that required consents and approvals
from regulatory authorities will not be obtained, that activity in
the lump or vein graphite business will not be at the level or of
the nature anticipated, liabilities and risks inherent in Saint
Jean's operations, technical problems, equipment failure and
construction delay.
Statements of past performance should not be construed as an
indication of future performance. Forward-looking statements
involve significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not such results
will be achieved. A number of factors, including those discussed
above, could cause actual results to differ materially from the
results discussed in the forward-looking statements. Any such
forward-looking statements are expressly qualified in their
entirety by this cautionary statement.
All of the forward-looking statements made in this press
release are qualified by these cautionary statements. Readers are
cautioned not to place undue reliance on such forward-looking
statements. Forward-looking information is provided as of the date
of this press release, and Saint Jean assumes no obligation to
update or revise them to reflect new events or circumstances,
except as may be required under applicable securities
laws.
Saint Jean Carbon Inc.Laurie McCarneyDirector of Corporate
Communications(905) 844-1200 ext:
305lmccarney@saintjeancarbon.comwww.saintjeancarbon.com
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