Argex closes brokered private placement of convertible debentures
- Gross proceeds to the Corporation of $7.5 million
- Largest shareholder contributes $2 million of total amount
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
MONTREAL, June 30, 2014 /CNW Telbec/ - Argex Titanium Inc. (TSX: RGX) ("Argex" or the "Corporation") announced today that it has closed a brokered private placement ("Private Placement") of unsecured convertible debentures of the Corporation ("Debentures"), for gross proceeds of $7.5 million. Euro Pacific Canada Inc. (the "Agent") acted as the lead agent and sole bookrunner for the Private Placement.
Roy Bonnell, President and CEO of Argex commented, "I am very pleased that we were able to close this Private Placement quickly and efficiently. The funds raised in this financing will propel the Corporation to the next level. Of significance, a majority of Argex Board members participated in this Private Placement and we are highly encouraged by the support of our largest shareholder who invested $2 million."
The rate of interest on the Debentures is 8% per annum. Interest on the Debentures shall be paid quarterly in arrears from September 30, 2014 and thereafter at the end of each quarter and on the maturity date, which is June 30, 2019 (the "Maturity Date").
The Debentures are convertible into common shares of the Corporation ("Common Shares") until the Maturity Date at the option of the debenture holder at a conversion price of $1.14 per Common Share (the "Conversion Price"); this represents a conversion rate of approximately 877 Common Shares per $1,000 principal amount of Debentures. The Corporation will use its best efforts to list the Debentures on the Toronto Stock Exchange after expiration of the four-month hold period, on October 31st, 2014.
In connection with this Private Placement of Debentures, the Corporation paid the Agent, a cash commission of $243,250. No warrants or broker warrants were issued in connection with this Private Placement. The net proceeds of the Private Placement will be used for the due diligence costs associated with the Corporation's financing of its first industrial-sized commercial production facility to be located in Valleyfield, Quebec and for general working capital purposes.
As previously announced on June 18, 2014, certain insiders of the Corporation participated in the Private Placement and subscribed for an aggregate principal amount of $2,080,000 of Debentures. Participation of insiders of the Corporation in the Private Placement constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions in Quebec) ("MI 61-101"). The Private Placement is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101, as neither the fair market value of securities being issued to insiders nor the consideration being paid by insiders will exceed 25% of the Corporation's market capitalization. The Corporation did not file a material change report 21 days prior to the closing of the Private Placement as the details of the participation of insiders of the Corporation had not been confirmed at that time.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the "United States", as such term is defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"). The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold in the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available.
About Argex Titanium Inc.
ARGEX Titanium Inc. is a near-term producer of Titanium Dioxide (TiO2) pigment. With a primary goal of advancing rapidly towards production, Argex has adopted a simple and low-risk strategy for the scale-up of its proprietary process. Argex is pleased to have selected Valleyfield, Quebec as the location for its Research & Development centre and first industrial-sized production facility.
This news release contains statements that may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking information and statements may include, among others, statements regarding the Private Placement, listing of the Debentures, and future plans, costs, objectives or performance of Argex, or the assumptions underlying any of the foregoing. In this news release, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forwardlooking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits Argex will derive. Forward-looking statements and information are based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond Argex's control. These risks, uncertainties and assumptions include, but are not limited to, and the ability of Argex or the Agent to satisfy all conditions precedent to the completion of the Private Placement, including receipt of all regulatory approvals for the Private Placement and completion of satisfactory due diligence by the Agent, TSX approval of the listing of the Debentures as well as those described under "Risk Factors" in Argex's Annual Information Form for the fiscal year ended December 31, 2013, which is available on SEDAR at www.sedar.com; they could cause actual events or results to differ materially from those projected in any forward-looking statements. Argex does not intend, nor does Argex undertake any obligation, to update or revise any forward-looking information or statements contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Argex Titanium Inc.For further information:
Roy Bonnell, President and Chief Executive Officer
Argex Titanium Inc.
514 843-5959 ext. 109
The Howard Group
Sun International Communications