KWG Resources organizes a shareholders’ meeting, proposes to divide the shares with multiple voting rights by three and to proceed with financing

Toronto, Ontario – (Newsfile Corp. – August 23, 2021) – KWG Resources Inc. (CSE: KWG) (CSE: KWG.A) (FSE: KW61) (“KWG” or the “Society”) (“KWG”) has filed proxy documents for an annual and special meeting of shareholders to be called on September 21, 2021, at which management will seek approval to amend the articles of association in order, among other things, to d ” adjust the share exchange ratio between its multiple voting shares and its subordinate voting shares from 300: 1 to 100: 1 by dividing each outstanding KWG.A multiple voting share into three multiple voting shares of KWG.A. KWG.A Multiple Voting Shares are currently convertible into 300 KWG Single Voting Shares (more commonly known as Subordinate Multiple Voting Shares) and, following the subdivision of Multiple Voting Shares, KWG Multiple Voting Shares. A will be convertible into 100 multiple voting shares of KWG.A. subordinate shares with single voting rights. Conversely, 300 subordinate voting shares of KWG are currently convertible into one multiple voting share of KWG.A and, following the subdivision of multiple voting shares of KWG.A, 100 voting shares of KWG will be convertible into one multiple voting share of KWG.A. Currently, each KWG.A multiple voting share carries 300 votes and each KWG subordinate voting share carries one vote; Following the subdivision of the multiple voting shares of KWG.A, each multiple voting share of KWG.A will carry 100 votes and each subordinate voting share of KWG will contain one vote. Management will also seek shareholder approval for the future creation of Preferred Shares and Special Shares, each in series, upon subsequent authorization by the Board of Directors of the Company.

“This will make our capitalization structure much simpler”, KWG CEO Frank Smeenk said. “KWG.A’s multiple voting shares will continue to allow buyers and sellers of our shares to narrow the market price differentials of single voting subordinate voting shares, but now the mental math for trading between two classes of actions be much easier. “

Financing offered by convertible debenture:

The closing of the first tranche of the previously announced private placement of $ 5 million convertible debentures is slated for mid-September, among other reasons, to allow certain policyholders to have their financial intermediaries use the limits in the account. tax-free savings. The Company had previously announced that it proposed to complete a private placement of convertible debentures at the option of the holder at any time or at the option of the Company after the first anniversary date in cash units at $ 15 each (each a “Unit”) for total proceeds of up to $ 5 million. The debentures will bear interest at a rate of 12% payable in units at maturity on June 30, 2023 or upon a prior conversion. Each unit will consist of two multiple voting shares of KWG.A (as currently constituted; or six multiple voting shares of KWG.A if the proposed subdivision of multiple voting shares of KWG.A is implemented) and one multiple voting share warrant entitling its holder to acquire another multiple voting share of KWG.A from the treasury upon payment of $ 9.60 (as such shares are currently constituted; or into three multiple voting shares of KWG.A at $ 3.20 each if the proposed subdivision of KWG. One multiple voting share is implemented), exercisable at any time before December 15, 2023.

Proposed flow-through unit funding:

In order to significantly reduce the Company’s working capital shortfall, a private placement of flow-through units is underway to, among other things, meet accumulated obligations in excess of $ 2.5 million. The Company proposes to issue up to $ 3.5 million in flow-through units at $ 9.00 per unit, each such flow-through unit being composed of one multiple-voting flow-through share of KWG.A ( as currently incorporated, i.e. prior to the proposed subdivision of KWG.A multiple voting shares; or at $ 3.00 per unit if the proposed subdivision of KWG.A multiple voting shares is implemented) and a warrant to purchase another multiple voting share of KWG.A for $ 10.50 (as presently constituted; or three multiple voting shares of KWG.A at $ 3.50 each if the proposed subdivision of the shares to multiple voting of KWG.A is implemented) at any time within 5 years.

About KWG:

KWG is the operator of the Black Horse joint venture after acquiring a 50% stake through Bold Ventures Inc. which is 10% owned (20% of KWG’s share capital in the joint venture) by KWG financing all exploration expenses. KWG also owns 100% of CCC which has staked mining claims between Aroland, Ontario and the Ring of Fire. CCC conducted a land survey and analysis program to assess the prospects for engineering and building a railway along this route between the Ring of Fire and Aroland, Ontario. Currently, CCC has engaged Cormorant Utilities and Rail-Veyor Technologies to complete engineering proposals for the construction of a utility corridor in the route. KWG also acquired intellectual property interests, including a method of directly reducing chromite to metallized iron and chromium using natural gas. KWG subsidiary Muketi Metallurgical LP is pursuing two chromite refining patent applications in Canada, India, Indonesia, Japan, Kazakhstan, South Africa, South Korea, Turkey and the United States -United. National phase filings are under review in each of these jurisdictions.

For more information, please contact:
Bruce Hodgman, Vice President: 416 642-3575 ~ This e-mail address is protected from spam. You need JavaScript enabled to view it.

Forward-looking statements: The information contained in this press release may involve forward-looking statements under applicable securities laws. The forward-looking statements contained in this document are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and KWG disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless expressly required by applicable securities legislation. Although management believes that the expectations represented in these forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities that may be described herein and, therefore, should not be relied on unduly. Neither the Canadian Securities Exchange nor its regulatory services provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this press release.

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