Pacific Road Resources Funds

October 30, 2015 17:00 ET

Pacific Road Resources Funds Announce Agreement to Extend and Replace Outstanding Notes of First Bauxite Corporation

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 30, 2015) - The Pacific Road Resources Funds ("PRRF") announce that PRRF has entered into an amending agreement with First Bauxite Corporation (the "Company"), pursuant to which PRRF agreed, subject to the satisfaction of certain conditions, to exchange, on the maturity date of its current interest-bearing promissory notes ("Existing Notes"), being January 19, 2016 (the "Existing Maturity Date"), its Existing Notes for promissory notes having a principal amount equal to the aggregate principal amount of the Existing Notes plus accrued but unpaid interest (the "Replacement Notes"). The Replacement Notes will mature on August 1, 2017 and bear interest at an annual rate of 8% (compounded quarterly and payable on maturity) and be convertible into common shares of the Company ("Common Shares") at a conversion price of C$0.05698 per Common Share for the first year of the term of the Replacement Notes and C$0.10 per Common Share thereafter, subject to adjustment. Interest on the notes may, at the election of PRRF, be paid in Common Shares at the then-current market price of the Common Shares.

The extension and replacement of the Existing Notes is being undertaken in connection with a refinancing transaction by the Company, pursuant to which, among other things, Resource Capital Fund VI LP ("RCF VI") has agreed to invest up to USD$15 million in two tranches by purchasing convertible notes on substantially the same terms as the Replacement Notes. In addition, Resource Capital Fund V LP ("RCF V") has agreed to extend and replace their outstanding notes and convertible notes for convertible notes on substantially the same terms as the Replacement Notes. The Replacement Notes and the notes issuable to RCF V will be subordinated to the promissory notes issued to RCF VI until the maturity date and thereafter will rank on a pari passu basis.

As the number of Common Shares issuable to PRRF is contingent, in part, upon future values and Common Share prices, the number of Common Shares that the Offeror could acquire on conversion of the Replacement Notes cannot be determined at this time. However, assuming full conversion of the Replacement Notes on the Existing Maturity Date, based on a conversion price of C$0.05698, the Offeror would acquire approximately 192,577,134 Common Shares, representing approximately 62.1% of the currently issued and outstanding Common Shares (without taking into account any dilution from the Company's other convertible securities, including the convertible notes issuable to RCF V and RCF VI).

No Common Shares or other securities of the Company have been acquired under the Amendment and no securities are expected to be acquired until the Existing Maturity Date.

After giving effect to the exchange of the Existing Notes for Replacement Notes, and assuming full conversion of the Replacement Notes as described above, the Offeror would hold, when such Common Shares are added to the 13,127,987 outstanding Common Shares held by the Offeror, the Offeror would hold 205,705,121 Common Shares, representing approximately 66.3% of the then outstanding common shares of the Company (without taking into account any dilution from the Company's other convertible securities, including the convertible notes issuable to RCF V and RCF VI).

In addition, the Offeror holds an option to purchase additional Notes from the Company in the aggregate principal amount of US$20 million (the "Second Tranche Notes") which will be convertible into common shares of the Company based on the formula as described in the joint press release issued on June 4, 2009. As the number of common shares issuable to the Offeror is contingent, in part, upon future values and share prices, the number of shares that the Offeror could acquire should it purchase the Second Tranche Notes and exercise its conversion rights in full cannot be determined at this time. However, based on the current minimum conversion price, the Offeror would acquire a minimum of 21,156,627 additional Common Shares (assuming a conversion price of CDN$1.245 and an exchange rate of US$1.00 equals CDN$1.3170). Assuming full exercise or conversion of all securities held by the Offeror as described above, and that no other convertible securities of the Company were converted or exchanged, the Offeror would hold approximately 226,861,747 Common Shares, representing approximately 68.5% of the then outstanding common shares of the Company (including the Replacement Notes, but without taking into account any dilution from the Company's other convertible securities, including the convertible notes issuable to RCF V and RCF VI).

PRRF agreed to exchange its Existing Notes for Replacement Notes for investment purposes and may or may not purchase or sell securities of the Company in the future on the open market or in private transactions, depending on market conditions and other factors.

A copy of the early warning report filed in connection with the investment is available on the Company's profile on SEDAR at www.sedar.com or may be obtained by contacting Greg Dick at +61 2 9241 1000.

About Pacific Road Resources Funds and Pacific Road Capital Management Pty Limited

The Pacific Road Resources Funds are private equity funds investing in the global mining industry. They provide expansion and buyout capital for mining projects, mining related infrastructure and mining services businesses located throughout resource-rich regions of the world. The Pacific Road Resources Funds are managed and advised by Pacific Road Capital Management Pty Ltd ("PRCM"). The PRCM team, located in Sydney, Australia, San Francisco, USA, and Vancouver, Canada, is comprised of experienced mining investment professionals that have extensive knowledge and experience in the mining and infrastructure sectors, including considerable operating, project development, transactional and investment banking experience. For further information on the Pacific Road Resources Funds and PRCM, please go to their website at www.pacroad.com.au.

Contact Information

  • Greg Dick
    +61 2 9241 1000