/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO
ANY UNITED STATES NEWS SERVICES/
CALGARY, Nov. 14, 2012 /CNW/ - 3MV Energy Corp. ("3MV" or the "Company") (TSXV: TMV) is pleased to announce it has today, November 14, 2012,
repaid its indebtedness in full under its secured subordinated credit
facility ("Subordinated Facility") in the principal amount of $2 million plus interest, fees and costs.
The Company used the gross proceeds from the Convertible Loan Offering
(as defined below) and the Unit Offering (as defined below), together
with funds on hand, to repay its indebtedness under the Subordinated
Closing of Convertible Loan Offering
3MV is also pleased to announce the closing of the $1,000,000
non-brokered private placement financing of convertible debentures (the
"Convertible Loan Offering"). Dallas Duce, a shareholder and director of 3MV, is indirectly the
sole subscriber to the private placement.
The Convertible Loan Offering consists of a convertible secured,
interest-bearing debenture loan of $1,000,000. The interest rate will
be 12% per annum, calculated and payable monthly. The term will be for
2 years, with the Company having a right to prepay upon thirty (30)
days notice. The loan is convertible at any time until maturity into
common shares of the Company at a conversion price of $0.29 per share.
Since Mr. Duce is a director and a control person of 3MV, the
Convertible Loan Offering is considered a related party transaction for
the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Following the closing of the Convertible Loan Offering, Mr. Duce
will, directly or indirectly, beneficially own or control 20,259,996
common shares (54.49%) of the Company on a non-diluted basis and
43,708,272 common shares of the Company (69.80%) on a fully diluted
According to MI 61-101, a related party transaction requires formal
valuation and minority shareholder approval unless exempt. The
Convertible Loan Offering is exempt from the formal valuation and
minority approval requirements due to the financial hardship exemption
set out in section 5.5(g) and section 5.7(1)(e) of MI 61-101. A
committee of independent directors reviewed the Convertible Loan
Offering and determined that as 3MV is in serious financial difficulty
and the Convertible Loan Offering is designed to improve the financial
position of 3MV, the terms of the Convertible Loan Offering are
reasonable in the circumstances of 3MV. Accordingly, the Convertible
Loan Offering is exempt from minority shareholder approval and formal
valuation requirements of M1 61-101.
The Convertible Loan Offering is closing in less than 21 days due to the
Company's immediate need to repay its secured lender under the
Subordinated Facility, which shorter period is both reasonable and
necessary in the circumstances. MI 61-101 requires if a material change
report is filed less than 21 days before the expected date of the
closing of the transaction, an explanation is to be provided why the
shorter period is reasonable or necessary in the circumstances.
Closing of Initial Tranche of Unit Offering
The Company is also pleased to announce that it has closed the initial
tranche of its previously announced non-brokered private placement (the
"Unit Offering") of up to 20,000,000 units (the "Units") at a price of $0.25 per Unit for aggregate gross proceeds of up to
$5,000,000. 3MV issued 440,000 Units for gross proceeds of $110,000.
Each Unit is comprised of one common share and one common share
purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one additional common
share of the Company at an exercise price of $0.50 per common share for
a period of 18 months following the date of issuance.
The Company will continue to offer the Units for sale at a price of
$0.25 per Unit for gross proceeds of up to an additional $5,000,000.
The Convertible Loan Offering and Unit Offering have been conditionally
approved by the TSX Venture Exchange ("TSXV") and are subject to its final approval. According to TSXV rules and
applicable securities legislation, the securities issued pursuant to
the Convertible Loan Offering and Unit Offering are subject to a
four-month and one day hold period, commencing on the closing date and
ending on March 15, 2013.
3MV is an oil and gas exploration and development company with assets
throughout west central Saskatchewan's Viking oil play.
The securities offered have not been and will not be registered under
the U.S. Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or applicable exemption
from the registration requirements. This news release does not
constitute an offer to sell or the solicitation of any offer to buy nor
will there be any sale of these securities in any province, state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such province, state or jurisdiction.
Certain statements in this news release constitute forward-looking
statements. The forward-looking statements contained in this document
are based on certain key expectations and assumptions made by 3MV.
Although 3MV believes that the expectations and assumptions on which
the forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because 3MV can
give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions,
by their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, the failure to obtain necessary regulatory approvals, risks
associated with the oil and gas industry in general (e.g., operational
risks in development, exploration and production; delays or changes in
plans with respect to exploration or development projects or capital
expenditures; the uncertainty of reserve estimates; the uncertainty of
estimates and projections relating to production, costs and expenses,
and health, safety and environmental risks), commodity price and
exchange rate fluctuations and uncertainties resulting from potential
delays or changes in plans with respect to exploration or development
projects or capital expenditures. Readers are cautioned that the
foregoing list of factors is not exhaustive. Additional information on
these and other factors that could affect 3MV's operations and
financial results are included in reports on file with Canadian
securities regulatory authorities and may be accessed through the SEDAR
The forward-looking statements contained in this document are made as of
the date hereof and 3MV undertakes no obligation to update publicly or
revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so
required by applicable securities laws.
Oil and Gas Disclosure
For the purpose of calculating unit costs, natural gas volumes have been
converted to a barrel of oil equivalent ("BOE") using six thousand cubic feet equal to one barrel unless otherwise
stated. A BOE conversion ratio of 6:1 is based upon an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. BOEs may be
misleading, particularly if used in isolation.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: 3MV Energy Inc.
For further information:
President & CEO
CFO, VP Finance