Mag Copper Limited
CNSX : QUE

Mag Copper Limited

August 06, 2013 10:54 ET

Mag Copper Announces Committment Letter to Insure US$15 Million Convertible Debentures

TORONTO, ONTARIO--(Marketwired - Aug. 8, 2013) - Mag Copper Limited ("Mag Copper" or the "Company") (CNSX:QUE) announces that it has received a commitment letter from S.W. Taylor & Co. Brokers (Middle East) Ltd. to insure US$15 million principal amount convertible debentures. Management intends to use the proceeds of the offering to put the past producing Fabie Bay Mine (copper, zinc, gold and silver), located in Quebec Canada, back into production. In addition, the Company intends to put the neighbouring Magusi Mine (copper, zinc, gold and silver) into production.

First Equity Bonds Holdings PTE. LTD., as lead arranger, conducted the due diligence on behalf of the insurer and arranged the commitment of the insurer in connection with this transaction. The commitment letter contemplates the issuance of US$15 million convertible debentures maturing five years from the date of issuance bearing interest at 8% per annum, payable annually, with the first two years of interest payments being placed in trust on closing of the issuance of the debentures. The debentures will be convertible at any time three years after the date of issuance and prior to maturity, and at the option of the Company, into common shares of the Company, at a conversion price equal to the 60 day average closing price of the common shares prior to the date of conversion. The convertible debentures will be secured against the assets and undertaking of the Company. It is expected that the issuance of the debentures will be completed within 60 days of receipt of the commitment letter.

In consideration as acting as lead arranger the Company has agreed to pay First Equity Bonds Holdings PTE Ltd., a fee of US$225,000 and as consideration for insuring the debentures S.W. Taylor & Co. Brokers (Middle East) Ltd. will receive a fee of US$300,000. In addition, the Company has agreed to pay a finder's fee of US$350,000 and 8,000,000 common shares in the capital of the Company, of which US$30,000 has already been paid, to an arm's length finder. The Company has paid CDN$50,000 in connection with the due diligence review.

The Company also announces that it is proposing to complete a private placement of 7,000,000 units at a price of $0.05 per unit for gross proceeds of $350,000. Each unit would be comprised of one common share of the Company and one-half of a common share purchase warrant. Each whole warrant will entitle the holder to acquire one common share at a price of $0.10 per common share for a period of eighteen months from the date of issuance. In addition, the Company is proposing to complete a private placement of 3,000,000 "flow-through" common shares of the Company at a price of $0.05 per flow-through common share for gross proceeds of $150,000. Proceeds of the flow-through offering will be used to conduct exploration on the Company's properties and the balance of the proceeds will be used to pay certain of the fees owing in connection of the issuance of the convertible debentures.

The Canadian National Stock Exchange has not reviewed this press release and does not accept responsibility for the adequacy or accuracy of this news release.

Cautionary Statement Regarding Forward-Looking Information

This press release contains "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking information is based upon the Company's beliefs, estimates and opinions as at the date of this press release, which the Company believes are reasonable, but no assurance can be given that these will prove to be correct. Furthermore, the Company undertakes no obligation to update or revise forward-looking information contained herein if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.

Forward-looking information relates to future events or to future conditions, performance or results of operations and reflects current expectations or beliefs regarding such matters including, but not limited to, information or statements with respect to: (i) the amount of mineral resources; (ii) exploration, development and production activities, including information regarding the potential mineralization and resources; (iii) the amount of future output over any period; (iv) net present value and internal rates of return of the mining operation; (v) assumptions relating to capital costs, operating costs and other cost metrics; (vi) assumptions relating to gross revenues, operating cash flow and other revenue metrics; (vii) assumptions relating to future price and demand for lithium and other macroeconomic metrics; (viii) exploration and development plans, including anticipated costs and timing thereof, time frames for completion, and anticipated time to production; (ix) mine potential and expected mine life; and (x) sources of and anticipated financing requirements.

All information other than matters of historical fact may be forward-looking information. In some cases, forward-looking information can be identified by the use of words such as "seek", "expect", "anticipate", "budget", "plan", "project", "estimate", "assume", "continue", "forecast", "intend", "believe", "predict", "potential", "target", "strategy", "goal", "may", "could", "would", "might", or "will" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.

Forward-looking information is based upon certain assumptions by the Company or its consultants and other important factors that, if untrue, could cause the actual results, performances or achievements of the Company to be materially different from future results, performances or achievements expressed or implied by such information. Such information is based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of lithium, anticipated costs and ability to achieve goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking information include, but are not limited to: (i) required capital investment and estimated workforce requirements; (ii) estimates of net present value and internal rates of return; (iii) future demand and market prices for lithium; (iv) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (v) anticipated timelines for the commencement of production; (vi) anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process; and (vii) future exploration plans and objectives.

By its nature, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to differ materially from those expressed or implied by such forward-looking information. Some of the risks and other factors that could cause actual results to differ materially from those expressed in the forward-looking information contained in this press release include, but are not limited to, risks and uncertainties relating to: (i) the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations; (ii) results of feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, (iii) the outcome of litigation in which the Company is or may in the future become involved; (iv) risks relating to possible variations in reserves, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined; (v) mining and development risks, including risks related to accidents, equipment breakdowns, labor disputes (including work stoppages and strikes) or other unanticipated difficulties with or interruptions in exploration and development; (vi) risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; (vii) risks related to future commodity demand and price and foreign exchange rate fluctuations; (viii) the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates; (ix) risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental approvals or in the completion of development or construction activities; (x) risks related to environmental regulation and liability; (xi) political and regulatory risks associated with mining and exploration; (xii) risks related to the uncertain global economic environment; and (xiii) other risks and uncertainties related to the Company's prospects, properties and business strategy. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in the forward-looking information, investors and others are cautioned that this list is not exhaustive and there may be other factors that the Company has not identified. Readers are cautioned not to place undue reliance on forward-looking information contained in this press release. All forward-looking information contained in this press release or incorporated by reference herein is expressly qualified by this cautionary note. For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the Company's public filings available at www.sedar.com.

Contact Information