Claim Post Resources Inc. Completes Over-Subscribed Non-Brokered Private Placement of Unsecured Convertible Debentures
Claim Post Resources Inc. (TSX VENTURE:CPS) ("Claim Post" or the "Company") is pleased to announce that it has completed its previously announced non-brokered private placement (the "Offering") of unsecured convertible debentures (the "Debentures"). Pursuant to the Offering, which was over-subscribed, the Company accepted subscriptions for Debentures totaling approximately $3.1 million.
The Debentures bear interest at a rate of 10% per annum and mature on June 21, 2018 (the "Maturity Date"). In lieu of a cash repayment on the Maturity Date, the Company has the option to pay all or any portion of the principal and/or accrued interest by issuing common shares ("Common Shares") to the holders of Debentures at a deemed price of $0.055 per Common Share.
The holders of the Debentures have the option at any time prior to the earlier of the Maturity Date, a "change of control" of the Company or the business day immediately preceding the date specified by the Company for redemption of the Debentures to convert the principal amount of some or all of the Debentures and accrued interest thereon into Common Shares at a conversion price of $0.055 per Common Share. Prior to the Maturity Date, the Company may at any time following the completion of a separate financing of at least $2 million for the purpose of developing the Company's "Seymourville Silica Sand Project" (the "Project Financing Date") at its option redeem all, or any portion of the principal and accrued interest on the Debentures at a cash price equal to all outstanding principal and accrued interest under each Debenture plus a redemption premium equal to either: (i) an additional 5% of the principal sum if the redemption occurs within six months from the date of issuance of the Debentures; or (ii) an additional 3% of the principal sum if the redemption occurs after six months from the date of issuance of the Debentures.
The net proceeds of the Offering will be used for the early repayment of existing shareholder loans owed to the Company, the final payment to a third party on a quarry lease on the Company's "Seymourville Silica Sand Project" and for general working capital purposes.
All of the directors of the Company, being Charles Gryba, Lowell Jackson, John Assman and Richard Williams, participated in the Offering in the aggregate amount of $655,000, thereby making the Offering a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). The Offering is exempt from the need to obtain minority shareholder and a formal valuation as required by MI 61-101 as the Company is listed on the TSX Venture Exchange and the fair market value of the Debentures to insiders or the consideration paid by insiders of the Company does not exceed 25% of the Company's market capitalization. The Company did not file a material change report more than 21 days before the expected closing date of the Offering as the details of the Offering, including the amount to be raised pursuant to the Offering and the participation therein by related parties of the Company, had not been confirmed at that time and the Company wished to close the Offering on an expedited basis for sound business reasons and in a timeframe consistent with usual market practices for transactions of this nature.
The Offering remains subject to the final acceptance of the TSX Venture Exchange. The Debentures and the Common Shares issuable upon conversion of the Debentures are subject to a statutory hold period expiring on October 22, 2017.
About Claim Post Resources Inc.
Claim Post Resources Inc. is a Canadian based mineral exploration company and a reporting issuer in Ontario, Alberta and British Columbia.
Claim Post is well positioned to take advantage of the significant and increasing market for frac sand and become a future leading provider of Tier 1 quality white silica sand proppant to shale oil drilling operations in the Williston Basin (both the Canadian and U.S. sides of the Border), and to the oil and natural gas plays in Western Canada from its Seymourville Frac Sand Project.
Claim Post is also the third largest land holder in Timmins Camp, after Goldcorp and Tahoe Resources, with properties that are prospective for gold and base metals. Management of the Company is focused on finding the missing western extensions of both the Dome and Hollinger gold systems.
There are 126,383,908 common shares of the Company currently issued and outstanding.
SOURCE: Claim Post Resources Inc.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.