NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES NEWSWIRE SERVICES
BAAR, Switzerland, March 26, 2020 (GLOBE NEWSWIRE) -- On March 17, 2020, Glencore AG, a wholly-owned subsidiary of Glencore plc (together “Glencore”) entered into a subscription agreement (the “Subscription Agreement”) with PolyMet Mining Corp. and its wholly-owned subsidiary Poly Met Mining, Inc. (together “PolyMet” or the “company”) providing for the issuance of unsecured convertible debentures (the “Debentures”) of up to USD$30 million or C$42.53 million (based upon the daily rate of exchange published by the Bank of Canada on March 17, 2020 of US$1 = C$ 1.4175).
The Debentures are unsecured. At the option of Glencore, the Debentures are convertible into common shares (“Common Shares”) of PolyMet Mining Corp. at any time after their issuance and prior to their maturity at the conversion price described below. The Debentures contain customary adjustment provisions.
The Debentures will be issued in four tranches throughout the calendar year in 2020, all of which are due on the earlier of March 31, 2023 or upon US$100 million of project financing. Interest will accrue on the Debentures at 4% per annum.
The principal amount of the first tranche (US$7 million or C$9.93 million (based upon the daily rate of exchange published by the Bank of Canada on March 17, 2020 of US$1 = C$ 1.4175)) which tranche was issued on March 17, 2020 is convertible Common Shares at a conversion price equal to USD$0.2223 per Common Share, equal to C$0.3151 per Common Share (based upon the daily rate of exchange published by the Bank of Canada on March 17, 2020 of US$1 = C$ 1.4175), which represents a 10% discount to the five-day volume weighted average price on the NYSE American on the date that the first Debenture was issued. All subsequent tranches will also be priced at a conversion price equal to USD$0.2223 per Common Share. Glencore may acquire up to a maximum of 134,952,767 Common Shares upon conversion of the Debentures, being approximately 13% of currently issued and outstanding Common Shares.
The proceeds from the issuance of the Debentures will be used primarily to advance on-going litigation associated with permits for the NorthMet project, to continue engineering and optimization efforts, and to meet general administrative obligations.
The number of Common Shares issuable pursuant to the warrant (the “2019 Warrant”) issued to Glencore in 2019 is 7,453,068 Common Shares with an exercise price of US$0.6384.
The number of Common Shares issuable pursuant to a certain warrant (the “2016-1 Warrant”) issued to Glencore in 2016 is 8,142,776 Common Shares with an exercise price of US$0.8665.
The number of Common Shares issuable pursuant to a certain warrant (the “2016-2 Warrant”, together with the 2016-1 Warrant and the 2019 Warrant the “Purchase Warrants”) was 721,302 Common Shares with an exercise price of US$0.6756.
Any Common Shares to be issued to Glencore in connection with any conversion of the Debentures would be acquired from treasury.
The foregoing description of certain terms of the Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement to be filed by PolyMet under its profile at www.sedar.com.
Summary of Glencore`s Current Holding of PolyMet
Prior to the entry into of the Subscription Agreement, Glencore held 720,084,055 Common Shares, representing approximately 71.6% of the issued and outstanding Common Shares. In addition, Glencore also held the Purchase Warrants which would result in a total of 16,317,146 Common Shares being issuable to Glencore upon exercise of all of the Purchase Warrants. Assuming exercise of all of the Purchase Warrants, but excluding issuance of Common Shares committed under existing compensation arrangements, Glencore would have held a total of 736,401,201 Common Shares representing approximately 73.3% of the Common Shares on a partially diluted basis (assuming no other Common Shares committed under existing compensation arrangements were issued by PolyMet) with the exercise prices described above.
If Glencore is issued 134,952,767 Common Shares upon conversion of the Debentures, Glencore would hold 855,036,822 Common Shares, representing approximately 85.1% of the issued and outstanding Common Shares. Glencore will also hold the Purchase Warrants which will result in a total of 16,317,146 Common Shares being issuable to Glencore upon exercise of all of the Purchase Warrants. Assuming exercise of all of the Purchase Warrants, but excluding issuance of Common Shares committed under existing compensation arrangements, Glencore would hold a total of 871,353,968 Common Shares representing approximately 86.7% of the Common Shares on a partially diluted basis (assuming no other Common Shares committed under existing compensation arrangements were issued by PolyMet) with the exercise prices described above.
Investment Intent
Glencore’s decision to enter into the transactions described above was made in the context of its overall investment purposes. Glencore will continue to review its investment alternatives from time to time and may determine to increase or decrease its equity ownership in PolyMet through the acquisition or sale of additional outstanding Common Shares or other securities of PolyMet through open market or privately negotiated transactions in accordance with applicable securities laws.
The head office of PolyMet is located at 100 King Street West, Suite 5700, Toronto, Ontario M5X 1C7.
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.sedar.com or by contacting the persons named below.
For further information, please contact:
Investors
Martin Fewings
t: +41 41 709 2880
m: +41 79 737 5642
martin.fewings@glencore.com
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. The Group's operations comprise around 150 mining and metallurgical sites and oil production assets.
With a strong footprint in over 35 countries in both established and emerging regions for natural resources, Glencore's industrial activities are supported by its global marketing network.
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's companies employ around 160,000 people, including contractors.
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.