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Crowflight Minerals INC. ('Crowflight' or the 'Company') (TSX: CML) provides an update regarding the offer letter from Jinchuan Group Ltd. ('Jinchuan') to acquire all of the common shares of Crowflight in consideration for an aggregate cash payment of $150,000,000 (the 'Offer').
For details regarding the Jinchuan offer letter, please see the Company's press release of April 6, 2010. Negotiations continue between representatives of the Company and Jinchuan, though the August 31, 2010 deadline confirming the validity of the Offer has passed (see press release of July 8, 2010). Crowflight intends to seek an extension to the validity date of the Offer. The Offer is premised on Jinchuan obtaining 100% of the offtake from the Bucko Lake Mine and any of the Crowflight exploration properties that are subsequently placed into production. The Offer is subject to Jinchuan being satisfied with its due diligence review of the Company and the receipt of all required government and regulatory approvals. The Offer is also subject to negotiation of a definitive agreement between Jinchuan and the Company and the Offer being approved by Crowflight shareholders. Also, as previously announced, Crowflight has issued and sold a convertible debenture (the 'Convertible Debenture') to King Place Enterprises Limited ('King Place') in the principal amount of Cdn$10,050,000 (see press release of August 27, 2010). The Convertible Debenture shall mature on February 27, 2011. Amounts owing under the Convertible Debenture shall be unsecured and interest shall accrue at a rate of 10% per annum, compounded annually. The holder shall be entitled to convert amounts owing under the Convertible Debenture into common shares of Crowflight at a price equal to the five-day VWAP at the time of conversion less the maximum discount allowed under Toronto Stock Exchange regulations at the time of conversion. However, King Place may not convert any portion of the amounts outstanding hereunder in excess of the amount that would result in the obligation to issue an aggregate number of shares exceeding 58,356,471 Common Shares without prior approval of disinterested shareholders. King Place, who is purchasing the Convertible Debenture, is currently the largest shareholder of Crowflight. Kingplace owns and controls a total of 247,029,971 common shares and 50,588,235 warrants of Crowflight prior to this private placement, or 42.5% of the issued and outstanding common shares of Crowflight on a non-diluted basis. Crowflight previously issued and sold a non-convertible debenture in the principal amount of $5,050,000 to King Place (see press release of August 9, 2010), which was cancelled and replaced by the Convertible Debenture. The Company intends to use the proceeds from the financing for the continued ramp up of the Bucko Lake mine in the Thompson Nickel Belt, Manitoba and for general corporate and working capital purposes. |
