PRESS RELEASE ABRAPLATA | September 01, 2020
Toronto – September 01, 2020: AbraPlata Resource Corp. (TSX.V:ABRA; OTCPK: ABBRF) (“AbraPlata” or the “Company”) is pleased to announce that it has closed its previously announced non-brokered private placement (the “Placement”). In connection with the closing of the Placement, the Company issued 66,666,666 units (each, a “Unit”) at a price of $0.27 per Unit for gross proceeds of $18.0 million. Each Unit consisted of one common share in the equity of the Company (each, a “Common Share”) and one-half of one share purchase warrant (each whole warrant, a “Warrant”).
Each Warrant entitles the subscriber to purchase one additional Common Share at a price of $0.40 until the second (2nd) anniversary of the closing date of the Placement. Notwithstanding the foregoing, in the event that, following the January 2, 2021, the volume weighted average price on the TSX Venture Exchange has been at least $0.70 for 20 consecutive trading days, the Company may deliver a notice to the holders of Warrants accelerating the Expiry Date to the date that is 30 days following such notice, and any unexercised Warrants after such period shall automatically expire.
Mr. Eric Sprott through 2176423 Ontario Ltd. (“2176423”), a corporation which is beneficially owned by him, acquired 36,481,500 Units pursuant to the Private Placement. After closing of the Placement, Mr. Sprott now beneficially owns or controls 62,481,500 Common Shares and 44,240,750 Common Share purchase warrants, representing approximately 15.8% of the Company’s issued and outstanding Common Shares on a non-diluted basis and 24.3% on a partially diluted basis assuming exercise of all warrants held by Mr. Sprott. Prior to the closing of the Placement, Mr. Sprott owned 26,000,000 Common Shares and 26,000,000 Common Share purchase warrants. Mr. Sprott has signed an undertaking not to exercise his warrants until such time as the Company can obtain disinterested shareholder approval of the creation of a new control person, which is required once Mr. Sprott passes the 20% ownership threshold. The Company has agreed to call a shareholders’ special meeting within 4 months of the closing of the Placement, at which time such approval will be sought.
The Units were acquired by Mr. Sprott, through 2176423, for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of the Company including on the open market or through private acquisitions or sell securities of the Company including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.
A copy of 2176423’s early warning report will appear on the Company’s profile on SEDAR and may also be obtained by calling 416-945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).
Mr. John Miniotis, President and CEO of AbraPlata commented, “With a strong balance sheet consisting of over $25 million in cash, AbraPlata is now very well positioned to aggressively advance Diablillos and continue to unlock value for shareholders. We are very pleased that Mr. Sprott is now the largest shareholder of AbraPlata and combined with Altius Minerals Corp. and SSR Mining Inc., the three parties collectively own over 36% of the Company.”
The proceeds of the Placement will be used to advance exploration activities at the Diablillos Silver-Gold project and for general working capital purposes. In connection with the completion of the Placement, the Company will pay aggregate finders’ fees of $1,035,217 to Clarus Securities Inc., Haywood Securities Inc. and Canaccord Genuity Corp. and issue 4,000,000 broker warrants exercisable for Common Shares at a price of $0.27 until the Expiry Date.
All securities issued in connection with the closing of the Placement are subject to a four-month-and one-day statutory hold period in accordance with applicable securities laws.
Mr. Sprott is an insider of the Company. In addition, officers and directors of AbraPlata subscribed in the Placement for an aggregate of 199,966 Units and the participation of such officers and directors of AbraPlata and Mr. Sprott in the Placement constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Placement is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to section 5.5(a) and section 5.7(1)(a) as the fair market value of the participation of Mr. Sprott and the directors and officers is not more than 25% of the Company’s market capitalization. The Company did not file a material change report in respect of the related-party transaction at least 21 days prior to the closing of the Placement, which the Company deems reasonable in the circumstances so as to be able to avail itself of the proceeds of the Placement in an expeditious manner
The securities offered in the Placement have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons, absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release does not constitute an offer to sell or the solicitation of any offer to buy securities in the United States, nor in any other jurisdiction.
