DENVER, CO, Jan. 20, 2017 /CNW/ - Resource Capital Fund VI L.P. ("RCF VI") reports that on January 18, 2017 the amendment (the "Amending Agreement") to the loan agreement dated November 25, 2015 (the "Loan Agreement") became effective. Pursuant to the terms of the Amending Agreement, RCF VI agreed to increase the principal amount of the unsecured loan previously advanced to Talon from US$14,000,000 to US$16,000,000.
As consideration for the RCF VI's agreement to increase the principal loan amount, Talon issued 15,000,000 common share purchase warrants (the "Warrants") to RCF VI. Each Warrant is exercisable for one common share of Talon (each a "Warrant Share") at an exercise price of C$0.11 per Warrant Share until January 18, 2021.
Under the Loan Agreement, as amended, by the Amending Agreement, RCF VI maintains the right to elect to convert all or part of the principal amount of the unsecured loan (including capitalized interest) into Common Shares at any time, at a conversion price of C$0.156 per Common Share. The outstanding principal amount under the Loan Agreement, as amended, will continue to bear interest at a rate of 12% per annum until the maturity date, being the earlier of: (i) November 25, 2018; and (ii) the date upon which RCF VI elects to accelerate the due date upon the occurrence of certain events, including an event of default.
Any amount being converted pursuant to RCF VI's conversion right shall be converted from United States dollars into Canadian dollars based on the currency exchange rate as reported by Bloomberg as of 5:00 p.m. (EST) on the first business day preceding the conversion date.
Prior to the Amending Agreement becoming effective and the issuance of the Warrants, RCF VI owned 12,376,097 Common Shares, representing approximately 9.5% of the 129,645,201 then issued and outstanding Common Shares. Assuming the full conversion of the principal amount and capitalized interest before the Amending Agreement became effective and the issuance of the Warrants, RCF VI would own 129,419,686 Common Shares (based on the exchange rate on January 17, 2017) representing approximately 52.5% of the 246,688,790 then issued outstanding Common Shares on a partially diluted basis.
Upon effectiveness of the Amending Agreement and assuming only the exercise of the newly issued Warrants, RCF VI would hold 27,376,097 Common Shares representing approximately 18.9% of the 144,645,201 then issued outstanding Common Shares on a partially diluted basis.
Upon effectiveness of the Amending Agreement and assuming the full conversion of the increased principal amount, capitalized interest, expected capitalized interest and the exercise of the newly issued Warrants, RCF VI would hold 208,021,408 Common Shares (based on the exchange rate on January 17, 2017), representing approximately 63.9% of the 325,290,512 then issued and outstanding Common Shares on a partially diluted basis.
The Warrants were issued by Talon and not acquired on the secondary market. RCF VI acquired the Warrants for investment purposes. RCF VI may from time to time acquire additional securities, exercise convertible securities, dispose of some or all of the existing or additional securities or may continue to hold the securities of Talon.
Talon's head office is located at Craigmuir Chambers, P.O Box 71, Road Town, Tortola, British Virgin Islands.
In accordance with applicable law, the Warrants will be subject to a four month hold period commencing on January 18, 2017.
To obtain a copy of the early warning report filed under applicable Canadian securities laws in connection with the transactions hereunder, please see Talon's profile on the SEDAR website www.sedar.com.
About Resource Capital Fund VI L.P.
RCF VI is a private investment fund existing under the laws of the Cayman Islands.
SOURCE Resource Capital Fund VI L.P.
For further information: and to obtain a copy of the early warning report, please contact: Resource Capital Fund VI L.P. 1400 Sixteenth Street, Suite 200, Denver, CO, 80202, Telephone: (720) 946-1444, Attn: Molly Campbell