Resource Capital Fund IV L.P. and Resource Capital Fund VI L.P. Acquire Shares of Alloycorp Mining Inc. pursuant to Loan Agreements

DENVER, July 4, 2016 /CNW/ - Resource Capital Fund IV L.P. ("RCF IV") and Resource Capital Fund VI L.P. ("RCF VI") report that they have acquired in aggregate 122,000,000 common shares of Alloycorp Mining Inc. (the "Acquired Shares") pursuant to the partial conversion of loans outstanding under the Amended and Restated Loan Agreement dated July 12, 2013, as amended on December 31, 2014, June 30, 2015 and December 22, 2015, between Alloycorp Mining Inc. ("Alloycorp" or the "Company"), its wholly-owned subsidiary, Avanti Kitsault Mine Ltd. ("AKM"), RCF IV and RCF VI (the "Bridge Loan Agreement") and the Preconstruction Loan Agreement dated December 19, 2013, as amended on December 31, 2014, June 30, 2015 and December 22, 2015, between Alloycorp, AKM and RCF VI (the "Preconstruction Loan Agreement" and, together with the Bridge Loan Agreement, the "Loan Agreements").

Pursuant to the Loan Agreements, RCF IV and RCF VI, as applicable, may convert amounts outstanding under the Loan Agreements into common shares of Alloycorp ("Common Shares").  Common Shares received under the Loan Agreements are subject to a four-month hold period.  The Acquired Shares consist of:  

  • 7,650,000 Common Shares issued to RCF IV in respect of conversion of USD$4,117,964 principal amount owing to RCF IV pursuant to the Bridge Loan Agreement; and

  • 114,350,000 Common Shares issued to RCF VI in respect of conversion of USD$48,363,965 principal amount owing to RCF VI pursuant to the Preconstruction Loan Agreement.

The loans made pursuant to the Loan Agreements were converted into Common Shares at a conversion price of C$0.7 per Common Share in respect of the Bridge Loan Agreement and C$0.55 per Common Share in respect of the Preconstruction Loan Agreement. The outstanding balances of the Loan Agreements are convertible at the same prices.  Additionally, RCF IV and RCF VI hold warrants to purchase up to 15,000,000 Common Shares which are exercisable at C$0.85 until July 12, 2016.

Immediately following the conversions, RCF IV and RCF VI transferred 246,548,990 Common Shares (comprised of the Acquired Shares and all other Common Shares held by RCF IV and RCF VI) to 1080224 B.C. LTD. ("RCF BC"), an indirect wholly-owned subsidiary of RCF IV and RCF VI.

RCF BC, RCF IV and RCF VI (collectively, "RCF") are under common management by RCF Management LLC. Prior to receiving the Acquired Shares, RCF owned and controlled approximately 82.0% of the outstanding Common Shares. Including the Acquired Shares, RCF now owns and controls 246,548,990 Common Shares representing approximately 90.0% of the outstanding Common Shares.

On June 30, 2016, RCF entered into an agreement with Alloycorp providing for the privatization of the Company by RCF whereby shareholders of Alloycorp, other than RCF, will receive $0.05 for each Common Share of the Company.  The privatization will be effected through an amalgamation of the Company and RCF BC under the Business Corporations Act (British Columbia).  RCF acquired the Acquired Shares to facilitate the privatization of Alloycorp.

 

SOURCE Resource Capital Fund IV L.P.

For further information: For further information and to obtain a copy of the revised early warning report filed under applicable Canadian securities laws in connection with the transactions hereunder, please see Alloycorp's profile on the SEDAR website www.sedar.com or contact: 1080224 B.C. LTD., 1400 Sixteenth Street, Suite 200, Denver, CO, 80202, Telephone: (720) 946-1444, Attn: Molly Campbell; Resource Capital Fund IV L.P., 1400 Sixteenth Street, Suite 200, Denver, CO, 80202, Telephone: (720) 946-1444, Attn: Molly Campbell; Resource Capital Fund VI L.P, 1400 Sixteenth Street, Suite 200, Denver, CO, 80202, Telephone: (720) 946-1444, Attn: Molly Campbell


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