Niocan Inc.

Niocan Inc.

June 29, 2011 15:10 ET

Niocan Enters Into Binding Term Sheet for Private Placement Financing With Nio-Metals Holdings LLC

TORONTO, ONTARIO--(Marketwire - June 29, 2011) - Niocan Inc. ("Niocan" or the "Company") (TSX:NIO) announced today that the Company has entered into a binding term sheet ("Term Sheet") with Nio-Metals Holdings LLC ("Nio-Metals") pursuant to which Nio-Metals has agreed to purchase by way of private placement a minimum of 2,000 units (each, a "Unit") and a maximum of 4,000 Units at an issue price of $1,000 per Unit, representing aggregate gross proceeds to the Company of a minimum of $2 million and a maximum of $4 million (the "Private Placement"). Each Unit comprises one $1,000 principal amount of debenture ("Debenture") and 370 transferable common share purchase warrants of Niocan (each, a "Warrant"). Each Debenture will mature one year from the closing of the Private Placement and will bear annual interest at a rate of 10%. The principal amount and interest may be payable in cash or common shares of Niocan ("Common Shares") at Niocan's sole option, with the number of shares to be determined based on a price of $1.45 per Common Share (the "Conversion Price"). Niocan will also have the right to redeem the Debentures prior to maturity at a cash redemption price of 105% of the principal amount. Each Warrant will entitle the holder thereof to purchase one additional Common Share at a price of $1.45 (the "Exercise Price") until 5:00 p.m. on the day that is 2 years from the date of the issuance of the Warrant. Nio-Metals will purchase at least 2,000 Units and Niocan may seek other purchasers for the additional 2,000 Units. Niocan may require Nio-Metals to purchase any remaining Units not acquired by other purchasers. The Private Placement is required to be completed no later than July 29, 2011 and is conditional on entry into definitive agreements and regulatory approval.

Pursuant to the Term Sheet, the Company has agreed to allow Nio-Metals to nominate one member of the board of directors of Niocan (the "Board") and have an observer present at all meetings of the Board. The Company and Nio-Metals have also agreed to work together to evaluate the optimal composition of the Board, implement a management team and develop a business plan for the Company.

The Company acknowledges that it also received a revised financing proposal from Augyva Mining Resources Inc. ("Augyva") on June 27, 2011 (the "Augyva Proposal") and has concluded that the Term Sheet is superior to the Augyva Proposal and in the best interests of shareholders for the following reasons:

  • the Conversion Price and the Exercise Price of $1.45 provided for in the Term Sheet is superior to the price proposed by Augyva of $1.30 per unit of Niocan (consisting of a common share and fractional common share purchase warrant) and the exercise price of $1.35 per common share purchase warrant of Niocan;
  • the Term Sheet provides Niocan with the optionality to seek alternative forms of financing over the next year that may not result in shareholders incurring the substantial dilution that would result from the Augyva Proposal or, in the event that the Company is unable to raise financing on better terms, convert the Debentures into Common Shares (subject to TSX approval); and
  • the Term Sheet contemplates the Company working together with Nio-Metals to implement a management team and develop a business plan for the Company.

Interim CEO Hubert Marleau said: "We are very pleased with the support demonstrated from our major shareholder by way of this financing and we look forward to the participation of new shareholders also. The Special Committee has been through an exhaustive process to review all the options currently available to the Company and we believe that this financing is superior to any alternative reviewed to date. The financing will allow the company to focus on identifying a dedicated management team and the creation of a detailed business plan to further enhance the development of our assets. The optionality provided by the financing minimizes the current dilution to all shareholders of Niocan, with the intention of preserving significant shareholder value."

About Niocan

Niocan's mission is to become a ferroniobium producer as soon as possible, following the issuance of a Certificate of Authorization from the Ministry of Sustainable Development, Environment and Parks for its Oka niobium property. Mining assets include mining rights in two (2) properties: 48 claims covering 1604 acres as well as surface rights on 231 acres at Oka and the Hudson Bay Great Whale Iron property covering 17,098 acres.

On behalf of the Board of Directors


Certain statements contained in this press release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties, relating to the issuance by the Ministry of Environment of the Certificate of Authorization to build the mine in Oka, financial resources, market prices, exchange rates, politicosocial conflicts, competition, the purchase of the old St-Lawrence Columbium mine site from the Municipality of Oka should the Certificate of Authorization be issued, and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk and Uncertainties Section of the Corporation's most recent Management's Discussion and Analysis, which may be found at Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.

Contact Information

  • Hubert Marleau
    Interim Chairman of the Board and CEO
    514-843-4809 (FAX)