American CuMo Mining Closes Oversubscribed Private Placement
American CuMo Mining Corporation (“CuMoCo” or the “Company”) (TSXV: MLY; OTCQX: MLYCF) is pleased to announce that the second and final tranche of its non-brokered private placement of up to 15,000,000 units (“CuMoCo Units”) at a price of Cdn$0.075 per unit (the “CuMoCo Offering”), announced on October 10, 2017, has been closed and oversubscribed. The Board of Directors approved an increase in the size of the CuMoCo Offering, and the Company has sold a total of 19,625,699 CuMoCo Units for total gross proceeds of $1,471,927. The proceeds of the CuMoCo Offering have been applied toward the repayment of the IEMR Debentures.
Each CuMoCo Unit consists of one common share of the Company and one share purchase warrant (a “Warrant”) exercisable to purchase one common share of the Company at a price of Cdn$0.125 per common share until December 5, 2019, subject to an acceleration provision whereby the term of the Warrants may be accelerated in the event that the Company’s common shares trade at or above a price of Cdn$0.175 per share for a period of 10 consecutive trading days. In such case, the Company may, at its option, accelerate the expiry date by delivery of notice to the holder and issuing a press release announcing such acceleration, and, in such case, the expiry date of the Warrants shall be deemed to be the 20th day following the later of the date on which the acceleration notice is sent to the holder of the Warrants and the date of issuance of the press release. All securities issued pursuant to the CuMoCo Offering will be subject to a four-month hold period, expiring on April 5, 2018.
Insiders and their associated parties, each being a “related party” of the Company (as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”)), have subscribed for a total of 575,000 CuMoCo Units as follows: Shaun Dykes (President, CEO and a Director of the Company) and his associated parties, for 200,000 CuMoCo Units; Trevor Burns (Vice-President, Corporate Communications, CFO and a Director of the Company) for 375,000 CuMoCo Units. The Company has relied upon the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101 based on the fact that the fair market value of the related party participation in the CuMoCo Offering will not exceed 25% of the Company’s market capitalization prior to the closing of the CuMoCo Offering. The Board of Directors approved the participation of insiders in the CuMoCo Offering with the individual insiders who are directors abstaining from voting on their participation.
As announced in the Company’s news release November 29, 2017, the Company continues to offer of up to CAD 2 million in convertible debentures. The convertible debentures have a duration of seven years, are secured by the assets of Idaho CuMo Mining, and pay 8.75% interest per annum, with interest paid in quarterly instalments. The debentures are convertible into common shares of CuMoCo at Cdn$0.075 and carry a five-year warrant exercisable at Cdn$0.1125 per share. The debentures are automatically renewed on a yearly basis at the discretion of the holder and can be converted into stock at any time following four months and one day from the date of closure. Should the holder decide not to renew the debentures, the Company has ninety days to repay the principal owed. The debentures are subject to final approval by the TSX Venture Exchange. Several investor groups have expressed interest in the debentures and the Company intends to use these funds, along with other financing efforts, to repay the debentures owed to IEMR HK, to fund a Pre-Feasibility Study for the CuMo Project that will include the Ore-Sorting results and other optimizations to improve on the results in the November 15, 2015 Preliminary Economic Analysis (PEA), and to continue analyzing the results of the Calida Gold 2017 work program.
Mr Shaun M. Dykes, M.Sc. (Eng), P.Geo., President and CEO of the Company, is the designated qualified person for the CuMo Project and the Calida Gold project and has prepared the technical information contained in this news release.
CuMoCo is focused on advancing its CuMo Project towards feasibility. CuMoCo is also advancing its newly-acquired Calida Gold project. For more information, please visit cumoco.com, idahocumo.com and cumoproject.com.
For further information, please contact:
American CuMo Mining Corporation
Shaun Dykes, President and Chief Executive Officer
Tel: (604) 689-7902
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this new release.