SRG MINING INC. AND SPROTT PRIVATE RESOURCE LENDING II


Monreal Quebec, Jan. 26, 2021 (GLOBE NEWSWIRE) — Montreal, Quebec, January 26, 2021 – SRG Mining Inc. (TSXV: SRG) (“SRG” or the “Company”) is pleased to announce that the first tranche (installment 1’) of a $7.5 million (approximately $9.53 million) private placement of convertible debt financing (the “financing“) with Sprott Private Resource Lending II (Collector), LP (“sprat“). The Financing is the first portion of the funds the Company will raise should it be successful in its bid to acquire North American Lithium Inc. (“NAL“) Assets pursuant to the procedures of the Sales and Investor Recruitment Process relating to NAL (“SISP).

The company has had a stake in SISP since its inception in October 2019. Since then, the company has conducted thorough due diligence including multiple site visits and interviews with current and former management; interviews with previous NAL lenders, owners and suppliers; a review of daily production reports; and technical studies. In addition, the Company completed a review and revised the geological model of the deposit using NAL’s 2019 drill results as this had not previously been completed by NAL.

With this information, the Company completed a complete diagnosis of the NAL Project and prepared an execution plan to bring the NAL Project back into operation as an integrated operation and producing lithium chemicals within a 36 month period. SRG intends to implement its plan while minimizing its environmental footprint, maintaining worker health and safety as core values, respecting the interests of all stakeholders and ensuring the long-term viability of the project for its shareholders. The detailed plan has been prepared along with our bid Raymond Chabot Inc. as monitor under the SISP and secured lenders including Contemporary Amperex Technology (“CATL”) and Investissement Québec (“IQ“).

“After several months of due diligence and review, we have provided the Monitor and secured lenders, including the Quebec government and IQ, with an offer and action plan that we believe will maximize stakeholder value in this project,” said Benoit La Salle, Executive President of SRG. “Our offering provides secured lenders with a meaningful repayment of their debt and allows IQ to meaningfully participate in the project via SRG shares if the project is successful. SRG already has a shovel-ready graphite project in the battery materials space and the addition of NAL would further strengthen our portfolio. Our team consists of Québec-based mining professionals who have made a name for themselves rehabilitating ailing mining operations worldwide. Our bid by Quebecers for a project in Québec maximizes the lithium resource by providing an on-site conversion facility from day one of restart.”

Convertible Senior Debentures Financing

installment 1

Tranche 1, which was completed and funded on January 25, 2021, was $800,000 and includes a subscription for 109,900 common shares of the Company (the “Incentive Stocks“). Incentive shares will be issued at a deemed price representing a 10% discount to the closing share price on January 22, 2021, equal to $0.58 per share.

Tranche 1 will, at Sprott’s option, be converted into common shares of the Company at a conversion price of C$0.70 per share (“Tranche 1 conversion price“).

installment 2

Tranche 2 represents $6,700,000 and is intended to be disbursed subject to certain conditions including, but not limited to, the successful completion of the capital increase contemplated to acquire the NAL assets (the “equity financing‘), should the Company be the successful bidder of the SISP for NAL (the ‘Deadline“).

Tranche 2 will, at Sprott’s discretion and subject to regulatory approval, be converted into common shares of the Company at a conversion price equal to (i) C$0.74 per share or (ii) the equity financing price (whichever is less) (“Tranche 2 conversion price“).

At the same time, the Sprott Company will issue 5,000,000 Warrants (each a “warranty”), with each warrant entitling the holder to purchase one common share and containing customary anti-dilution clauses. The Warrants are fully transferable and have a term of 3 years from their date of issuance and an exercise price equal to a 15% premium over the lower of (a) the 20-day volume weighted average price of the Company’s common shares prior to the Closing Date and ( b) the price at which the Company’s common stock will be issued as part of the equity financing price (the “exercise price“).

The interest rate on the Convertible Senior Notes under the Financing is 8.00% per annum, payable semi-annually in arrears on the last day of June and December of each year beginning June 30, 2021, calculated on the basis of a 360 day consisting of twelve days 30-day months.

The financing is subject to certain conditions, including but not limited to receipt of all necessary approvals, including final approval of the TSX Venture Exchange. All securities that may be issued in connection with the Financing will be subject to a four month hold period from the date of issuance in accordance with applicable Canadian securities laws.

The net proceeds of the financing will be used to provide the funds necessary to complete and pursue the NAL offering.

About SRG Mining

SRG Mining is a Canada-based mining company focused on the development of the Lola graphite deposit in the Republic of Guinea, West Africa. SRG is committed to acting in a socially, ecologically and ethically responsible manner.

Further information can be found on the SRG website at www.srgmining.com.

About sprott

Sprott is a global wealth manager that offers investors access to highly differentiated precious metals strategies. Sprott’s specialty investment products include innovative physical metals trusts, managed equities, mining ETFs, and private equity and debt strategies. We also work with resource companies to meet their capital needs through our brokerage and resource lending activities. Sprott is based in Toronto with offices in New York, San Diego and Vancouver. Sprott’s common stock is listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol “SII.”

Today, Sprott serves more than 200,000 customers worldwide and manages assets of around 16.3 billion US dollars.

Contact :

Benoît La Salle, FCPA FCA

E-mail: [email protected]

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of Canadian securities legislation. Any information contained herein that is not clearly historical in nature may constitute forward-looking information. Generally, such forward-looking information is identified by the use of forward-looking terms such as “firm,” “expects,” “plan,” “intend,” “minimize,” “maintain,” “ensure,” “potential,” “will,” ” “continue,” “perform,” “deliver,” “believe,” or variations of such words and phrases, or state that certain actions, events, or results “may,” “could,” “would,” or “might.” “. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause the Company’s actual results, level of activity, performance or achievements to differ materially from those expressed or implied in such forward-looking information, including but not limited to limited to: (i) volatile share price; (ii) general global markets and economic conditions; (iii) the possibility of write-downs and impairments; (iv) the risk associated with the exploration, development and operation of mineral deposits and mine plans for the mining operations of the Company; (v) the risk associated with establishing ownership of mineral properties and assets, including permitting, development, operations and production from the Company’s operations, in accordance with expectations and projections; (vi) Sch fluctuations in commodity prices, seeking buyers and potential customers or enforcing such agreements against the same and other risks and factors described or referenced in the “Risk Factors” section of the Company’s MD&A and which are available at www. sedar.com, all of which should be reviewed in conjunction with the information in this press release.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that could cause results not to be as anticipated, estimated or intended to fail. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Such forward-looking information has been provided to assist investors in understanding the Company’s business, operations and exploration plans and may not be appropriate for any other purpose. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this press release and the Company undertakes no obligation to update such forward-looking information except in accordance with applicable securities laws.


        
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