Powertech Closes Premium Financing Facility With Azarga Resources
October 22, 2013 (Source: Marketwired) — POWERTECH URANIUM CORP. (“Powertech” or the “Company”) (TSX:PWE)(FRANKFURT:P8A) is pleased to announce that it has closed a loan facility (the “Facility”) in the amount of US$3.6 million (the “Loan Amount”) which has been made available by Azarga Resources Limited (“Azarga”), and that Azarga has made an initial Advance of US$400,000 to the Company (the “Initial Advance”). The conversion of the Facility into common shares (each, a “Share”) in the capital of the Company and the portion of the Loan Amount in excess of $2.45 million remain subject to approval of the disinterested shareholders of the Company and of the Toronto Stock Exchange. The terms of the Facility are described in the Company’s news release dated October 21, 2013.
Concurrent with the closing of the Facility, the Company has converted the convertible debenture (the “Initial Debenture”) in the principal sum of US$500,000 which was issued to Azarga on July 31, 2013 into 8,450,035 Shares at CAD$0.07 per Share. Also, further to the Company’s news release dated October 21, 2013, the Company has issued 2,052,631 Shares to Thomas Doyle and 1,642,105 Shares to Greg Burnett in settlement of amounts owed to them, both at CAD$0.095 per Share.
Get our daily investorintel update
Upon conversion of the Initial Debenture, Azarga’s shareholdings of the Company were increased to 33,100,035 Shares representing 22.2% of the outstanding Shares of the Company on an undiluted basis, and 23.0% on a partially diluted basis. Azarga also holds 1,500,000 share purchase warrants, each of which is exercisable at CAD$0.20 per share. Assuming the Facility is converted at a Conversion Price of CAD$0.095 per Share within the first 12 months after the Initial Advance in accordance with its terms, approximately 44,886,316 new Shares would be issued to Azarga and Azarga would hold approximately 77,986,351 Shares representing 40.17% on an undiluted basis, and 40.63% on a partially diluted basis assuming exercise of the 1,500,000 warrants. The Shares issued to Azarga on conversion of the Initial Debenture are subject to a hold period expiring December 1, 2013, and 1,705,263 of the Shares on termination of the management agreements are subject to a hold period expiring February 22, 2014.
About Powertech Uranium Corp.
Powertech Uranium Corp. is a mineral exploration and development company that, through its Denver-based subsidiary Powertech (USA), Inc., holds the Dewey-Burdock Uranium Deposit in South Dakota, the Centennial Project in Colorado and the Dewey Terrace and Aladdin Projects in Wyoming. The Company’s key personnel have in-situ uranium experience throughout the United States, and worldwide. For more information, please visit www.powertechuranium.com.
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this News Release.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Facility, the Initial Debenture, and the Shares issued for settlement of deferred compensation and severance payments and on conversion of the Initial Debenture. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, and include statements regarding: (a) the repayment and conversion of the Facility, (b) the receipt of shareholder and TSX approval for the Facility and the conversion features associated with the Facility, (c) the future shareholdings of Azarga, (d) the expiry of the hold period on Shares issued on conversion of the Initial Debenture, and (e) the expiry of the hold period on Shares issued to Mr. Doyle and Mr. Burnett in settlement of the amounts payable to them on termination for severance. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including: (1) the loan facility agreement whereby the Facility is made available is terminated, (2) the repayment or conversion of the Facility is not completed as planned, (3) shareholder, TSX or any other necessary approvals are not obtained for the conversion features of the Facility or the repayment premiums thereunder, (4) the hold period on the Shares issued on conversion of the Initial Debenture and to Mr. Doyle and Mr. Burnett on termination of their management agreements will expire other than described in this news release,
(5) the inherent uncertainties and speculative nature associated with uranium exploration, including the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, possible variations in grade and ore densities or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents or other risks of the mining industry, (6) a decrease in the demand for and/or a decrease in the price of uranium, (7) an increase in the operating costs associated with the extraction and processing of the uranium, (8) any number of events or causes which may delay or cease exploration and development of the Company’s property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labour problems, (9) the risk that the Company does not execute its business plan, (10) inability to retain key employees, (11) inability to finance operations and growth, (12) an extended downturn in general economic conditions in North America and internationally, (13) an increase in the number of competitors with larger resources, and (14) other factors beyond the Company’s control. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. These forward-looking statements are made as of the date of this news release and the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements. Additional information about these and other assumptions, risks and uncertainties are set out in the “Risks and Uncertainties” section in the Company’s MD&A filed with Canadian security regulators at www.sedar.com.
Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>