NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES NEWSWIRE SERVICES
BAAR, Switzerland, Nov. 13, 2023 (GLOBE NEWSWIRE) -- On November 10, 2023 (the “Closing Date”), Glencore AG (as lender) (“Glencore”), a wholly-owned subsidiary of Glencore plc entered into an up to US$5,000,000 convertible facilities agreement with Tantalex Lithium Resources Corporation (as borrower) (the “Company”) and its wholly-owned subsidiary, Sandstone Worldwide Ltd (as guarantor) (the “Convertible Facilities Agreement”). The transaction contemplated by the Convertible Facilities Agreement (the “Transaction”) was anticipated in the Company’s news release of September 8, 2023.
Under the Convertible Facilities Agreement Glencore agreed to make available to the Company (a) a convertible term loan facility in an amount up to US$2,000,000 (“Facility A”) and (b) a convertible term loan facility in an amount up to US$3,000,000 (“Facility B”) (Facility A and Facility B together being the “Facilities”).
Facility A was made available subject to the satisfaction of certain conditions precedent. These were satisfied at the Closing Date. Facility B was made available subject to the satisfaction of certain conditions precedent. The Company has indicated to Glencore that the Company intends to satisfy such conditions precedent promptly. The Facilities shall terminate on December 1, 2025 (the “Termination Date”).
The Company has agreed to pay to Glencore a facility fee in an amount equal to 1.5 per cent of the aggregate amount of the Facilities as at the Closing Date.
The Facilities are convertible at Glencore’s option. At any time during the Conversion Period (defined below), Glencore has the option to subscribe for common shares in the capital of the Company (“Common Shares”) at the relevant conversion price. The conversion price for the Facilities is equal to the higher of (a) the closing price of the Common Shares published by Bloomberg for the scheduled trading day immediately prior to the Closing Date and (b) the 20-day volume weighted average trading price of the Common Shares published by Bloomberg for the 20 scheduled trading days immediately after the Closing Date less a 25 per cent. discount, in each case converted into US$ (the “Conversion Price”).
The Convertible Facilities Agreement provides for a conversion period that starts on the date that is 21 scheduled trading days after the Closing Date and ends at 5:30 pm (London time) on the business day before the Termination Date (“Conversion Period”).
At any time during the Conversion Period, Glencore has the option (in its absolute discretion) to convert specified amounts from the amounts that the Company has borrowed and which remain outstanding at that time under the Convertible Facilities Agreement (“Conversion Amounts”) into Common Shares (“Conversion Shares”). Conversion Amounts owing shall be converted into Conversion Shares (the “Conversion Number of Conversion Shares”) by dividing the applicable Conversion Amount by the Conversion Price. The issue of the Conversion Number of Conversion Shares to Glencore in accordance with the Convertible Facilities Agreement shall fully repay the applicable correlated Conversion Amount that was outstanding under the Convertible Facilities Agreement and completely discharges the obligations of the Company to repay that applicable Conversion Amount.
The closing price of the Common Shares published by Bloomberg for the scheduled trading day immediately prior to the Closing Date was Cdn.$0.09. Using Cdn.$0.09 as the Conversion Price, if Glencore were to convert the whole of the US$2,000,000 principal advanced under Facility A, Glencore could acquire up to 30,731,111 Common Shares, using a USD-to-CAD exchange rate of $1.3829, (which would represent 4.81% of the issued and outstanding Common Shares as of today) under the Convertible Facilities Agreement. The Conversion Price may be increased as described above, in which case, Glencore would receive fewer Common Shares which in turn would represent a smaller percentage of the whole. In addition if Tantalex borrows the full US$3,000,000 principal available under Facility B, the number of Common Shares that Glencore could acquire would be correspondingly increased.
Glencore is not entitled at any particular time to receive a Conversion Number of Conversion Shares such that Glencore would hold, immediately post conversion, more than 20% of the Common Shares (including any Common Shares held by Glencore prior to such conversion) (the “Cap”). Glencore did not hold any Common Shares prior to entering into the Convertible Facilities Agreement.
Each loan bears interest at rate equal to 3 month CME Term SOFR plus a margin.
Glencore and the Company have also entered into an offtake and marketing agreement (“Offtake and Marketing Agreement”) on the Closing Date in relation to the sale by the Company (as seller) and the purchase by Glencore (as buyer) of material from the Company’s Manono Project.
The Convertible Facilities Agreement contains events of default, representations and warranties, covenants, provisions relating to security and indemnities that are customary for similar transactions.
The head office of the Company is at 1410-120 Adelaide St. West, Toronto, Ontario, M5H 1T1, Canada. The head office of Glencore is located at Baarermattstrasse 3, CH-6340 Baar, Switzerland.
This news release does not constitute an offer to sell, nor the solicitation of an offer to buy, the securities in any jurisdiction; nor shall there be any sale of securities mentioned in this news release in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
This news release is being issued pursuant to National Instrument 62-103, persons who wish to obtain a copy of the early warning report to be filed by Glencore in connection with this transaction may obtain a copy of such report from www.sedarplus.ca or by contacting the persons named below.
For further information, please contact:
Investors
Martin Fewings
t: +41 41 709 28 80
m: +41 79 737 56 42
Media
Charles Watenphul
t: +41 41 709 24 62
m: +41 79 904 33 20
charles.watenphul@glencore.com
Notes for Editors
Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities that advance everyday life. Through a network of assets, customers and suppliers that spans the globe, we produce, process, recycle, source, market and distribute the commodities that support decarbonisation while meeting the energy needs of today.
With around 140,000 employees and contractors and a strong footprint in over 35 countries in both established and emerging regions for natural resources, our marketing and industrial activities are supported by a global network of more than 40 offices.
Glencore’s customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.
We recognize our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by decarbonizing our own operational footprint. We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions. Against a 2019 baseline, we are committed to reducing our Scope 1, 2 and 3 industrial emissions by 15% by the end of 2026, 50% by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050. For more detail see our 2022 Climate Report on the publication page of our website at glencore.com/publications.
Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.
