Rubicon Minerals Corporation
TSX : RMX

Rubicon Minerals Corporation

November 11, 2016 13:56 ET

Rubicon Minerals Announces Meetings of Creditors, Provides an Update on Restructuring Transaction, and Announces the Filing of Its Third Quarter 2016 Financial Statements

TORONTO, ONTARIO--(Marketwired - Nov. 11, 2016) - Rubicon Minerals Corporation (TSX:RMX) ("Rubicon" or the "Company") announces that the Company and its direct and indirect subsidiaries (the "Rubicon Companies") obtained an order on November 10th (the "Meetings Order") from the Ontario Superior Court of Justice (Commercial List) (the "Court) in proceedings (the "CCAA Proceedings") commenced by the Rubicon Companies on October 20, 2016 pursuant to the Companies' Creditors Arrangement Act (the "CCAA") authorizing the Rubicon Companies to, among other things, (i) file a plan of compromise and arrangement (the "Plan") pursuant to which the Company's previously announced refinancing and restructuring transaction (the "Restructuring Transaction") is to be implemented, and (ii) authorizing the Rubicon Companies to call meetings of their creditors to vote on the Plan.

Meetings of Creditors

Pursuant to the Meetings Order, the Company will hold Meetings to vote on the Plan on December 2, 2016 as follows:

  1. CPPIB Credit Investments Inc. ("CPPIB Credit") Meeting - 2:00 p.m.
  2. RG Gold AG ("Royal Gold") Meeting - 2:15 p.m.
  3. Unsecured Creditors Meeting - 2:30 p.m.

The Meetings will be held at the offices of Goodmans LLP at 333 Bay Street, Suite 3400, Toronto, Ontario.

Details of the Plan will be provided in an information statement to be distributed to affected creditors pursuant to the Meetings Order. Materials in connection with the Meetings, including the information statement and proxy materials, will also be made available on the website of the Court-appointed Monitor for the CCAA Proceedings at www.ey.com/ca/rubicon.

The implementation of the Restructuring Transaction and the Plan is conditional upon, among other things, receiving the requisite creditor approvals under the CCAA and Court approval in the CCAA Proceedings. If the Plan is approved by the requisite majorities of affected creditors, the Company intends to seek Court approval of the Plan on December 8, 2016 and will proceed to close the transaction shortly thereafter.

A copy of the term sheet which outlines the terms of the Restructuring Transaction is available on the Company's profile on SEDAR and on the Company's website at: www.rubiconminerals.com.

Financial Hardship Exemption Application

The Restructuring Transaction involves, among other things: (i) a new equity raise of up to C$45.0 million (the "New Equity Financing") by way of a private placement of subscription receipts (the "Subscription Receipts"); (ii) CPPIB Credit, Royal Gold, and certain securityholders receiving common shares, and (iii) the existing common shares of the Company being consolidated on a ratio of approximately 162.1 pre-consolidation Rubicon common shares to one post-consolidation common share (the "Share Consolidation").

The Company announced the successful closing of the New Equity Financing for C$45.0 million on November 4, 2016. An insider of the Company who currently owns approximately 11.0% of the Company's issued and outstanding common shares subscribed for approximately 9.1% of the subscription receipts.

The Company currently has 394,928,246 issued and outstanding common shares. The Company is expected to have 53,890,125 issued and outstanding common shares assuming completion of the Share Consolidation. The five-day weighted average trading price of the Company's pre-consolidation common shares ending on October 19, 2016, the last full day that the common shares on the TSX before trading in the shares was suspended by the TSX, was C$0.0467 per common share (the "Market Price").

Assuming completion in full of the Restructuring Transaction:

  • The Restructuring Transaction will increase the currently issued and outstanding common shares equivalent to 8,340,607,652 pre-consolidation common shares representing an increase of 2,012%;

  • The New Equity Financing represents a pre-consolidation price of C$0.0082 per common share (an 82.4% discount to the Market Price prior to the announcement of the Restructuring Transaction) or C$1.33 per post-consolidation common share. The New Equity Financing includes issuing:

    • 30,140,000 post-consolidated Subscription Receipts at a post-consolidated price of C$1.33, equivalent to the issuance of 4,885,664,125 pre-consolidated Subscription Receipts at a pre-consolidated price of C$0.0082 per common share resulting in the issuance of 4,882,664,125 pre-consolidated Common Shares; and

    • 3,700,000 post-consolidated Subscription Receipts to an insider of the Company at a post-consolidated price of C$1.33, equivalent to the issuance of 599,766,332 pre-consolidated Subscription Receipts at a pre-consolidated price of C$0.0082 per common share resulting in the issuance of 599,766,332 pre-consolidated Common Shares;

  • 14,536,341 post-consolidated Common Shares to CPPIB Credit in partial consideration for the reduction of the amounts outstanding under the Loan Facility, equivalent to the issuance of 2,356,326,444 pre-consolidated Common Shares at a price of C$0.0082 per common share (an 82.4% discount to the Market Price prior to the announcement of the Restructuring Transaction);

  • 3,007,519 post-consolidated Common Shares to Royal Gold, equivalent to the issuance of 487,515,816 pre-consolidated Common Shares at a price of C$0.0082 per common share (an 82.4% discount to the Market Price prior to the announcement of the Restructuring Transaction);

  • 69,925 post-consolidated Common Shares to holders of restricted share units, equivalent to the issuance of 11,334,934 pre-consolidated Common Shares at a price of C$0.0082 per common share (an 82.4% discount to the Market Price prior to the announcement of the Restructuring Transaction);

  • The equity ownership will be as follows: (i) subscribers in the New Equity Financing - 62.79%, (ii) CPPIB Credit - 26.97%, (iii) Royal Gold - 5.58% and (iv) currently existing shareholders and holders of restricted share units of the Company - 4.65%; and

  • The Company and CPPIB Credit will enter into an investor agreement, which shall provide CPPIB Credit with a nominee right while CPPIB Credit continues to hold 15% or more of the Company's Common Shares. The Company will also provide customary pre-emptive rights and registration rights to both CPPIB Credit and Royal Gold.

The Restructuring Transaction would ordinarily require approval from the holders of a majority of the currently issued and outstanding common shares of the Company, excluding the votes attached to the common shares held by the insider who participated in the New Equity Financing, under Sections 607(e), 607(g)(i), 607(g)(ii) and 604(a)(i) of the TSX Company Manual, unless an exemption is applicable, because the Restructuring Transaction will result in (i) the issuance of common shares that is greater than 25% of the number of common shares currently issued and outstanding, (ii) the issuance of common shares to an insider of the Company that is greater than 10% of the number of common shares currently issued and outstanding, (iii) the issuance of common shares beyond the 25% permitted discount to the Market Price, and (iv) the creation a new 20% shareholder of the Company.

The Company has applied to the TSX under the provisions of Section 604(e) of the TSX Company Manual for an exemption from the requirement for shareholder approval of the Restructuring Transaction on the basis that the Company is in CCAA proceedings and in financial difficulty (the "Application"). The independent and disinterested member of the Company's board of directors, who is free from any interest in the Restructuring Transaction, considered the reasonableness and fairness of the Restructuring Transaction and recommended to the Company's full board of directors that (i) the Restructuring Transaction be approved; and (ii) that the Company make the Application. The board of directors has approved the Restructuring Transaction. In addition, both the disinterested member of the board of directors and the Company's full board of directors determined that the Company met the applicable TSX financial hardship requirements and that the Restructuring Transaction is reasonable in the circumstances and designed to improve the Company's financial situation. The Company believes that, upon completion of the Restructuring Transaction, it will be in compliance with the TSX continued listing requirements.

TSX Expedited Listing Review Update

The Company has been notified that the TSX has deferred its decision regarding delisting the common shares of the Company with respect to meeting the requirements of continued listing until November 30, 2016. Although the Company believes that it will be in compliance with all TSX continued listing requirements upon conclusion of the delisting review, no assurance can be provided as to the outcome of such review and therefore, continued qualification for listing on TSX. The common shares will remain suspended from trading until further notice.

Third Quarter 2016 Financial Statements

The Company has filed its third quarter Financial Statements and related Management's Discussion and Analysis for the period ended September 30, 2016. The Company confirms that copies of Rubicon's interim financials can be obtained at www.rubiconminerals.com or www.sedar.com.

RUBICON MINERALS CORPORATION

Julian Kemp, Interim President, CEO, and Chair

Cautionary Statement regarding Forward-Looking Statements and other Cautionary Notes

This news release contains statements that constitute "forward-looking statements" and "forward looking information" (collectively, "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "believes", "intends", "may", "will", "should", "plans", "anticipates", "potential", "expects", "estimates", "forecasts", "budget", "likely", "goal" and similar expressions or statements that certain actions, events or results may or may not be achieved or occur in the future. In some cases, forward-looking information may be stated in the present tense, such as in respect of current matters that may be continuing, or that may have a future impact or effect. Forward-looking statements reflect our current expectations and assumptions, and are subject to a number of known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Forward-looking statements include, but are not limited to statements regarding the implementation of the Restructuring Transaction and its potential impact and outcomes on the Company, the Company's intended actions during the CCAA proceedings and the anticipated timing of the various steps of the CCAA proceedings.

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and represent management's best judgment based on facts and assumptions that management considers reasonable. If such opinions and estimates prove to be incorrect, actual and future results may be materially different than expressed in the forward-looking statements. The material assumptions upon which such forward-looking statements are based include, among others, that: the demand for gold and base metal deposits will develop as anticipated; the price of gold will remain at or attain levels that would render the Phoenix Gold Project potentially economic; that any proposed exploration, operating and capital plans will not be disrupted by operational issues, title issues, loss of permits, environmental concerns, power supply, labour disturbances, financing requirements or adverse weather conditions; Rubicon will continue to have the ability to attract and retain skilled staff; and there are no material unanticipated variations in the cost of energy or supplies.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rubicon to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others: possible variations in mineralization, grade or recovery or throughput rates; uncertainty of mineral resources, inability to realize exploration potential, mineral grades and mineral recovery estimates; actual results of current exploration activities; actual results of reclamation activities; uncertainty of future operations, delays in completion of exploration plans for any reason including insufficient capital, delays in permitting, and labour issues; conclusions of future economic or geological evaluations; changes in project parameters as plans continue to be refined; failure of equipment or processes to operate as anticipated; accidents and other risks of the mining industry; delays and other risks related to operations; timing and receipt of regulatory approvals; the ability of Rubicon and other relevant parties to satisfy regulatory requirements; the ability of Rubicon to comply with its obligations under material agreements including financing agreements; the availability of financing for proposed programs and working capital requirements on reasonable terms; the ability of third-party service providers to deliver services on reasonable terms and in a timely manner; risks associated with the ability to retain key executives and key operating personnel; cost of environmental expenditures and potential environmental liabilities; dissatisfaction or disputes with local communities or First Nations or Aboriginal Communities; failure of plant, equipment or processes to operate as anticipated; market conditions and general business, economic, competitive, political and social conditions; the implementation and impact of the Restructuring Transaction; our ability to generate sufficient cash flow from operations or obtain adequate financing to fund our capital expenditures and working capital needs and meet our other obligations; the volatility of our stock price, and the ability of our common stock to remain listed and traded on the TSX; our ability to maintain relationships with suppliers, customers, employees, stockholders and other third parties in light of our current liquidity situation and the CCAA proceedings.

Forward-looking statements contained herein are made as of the date of this news release and Rubicon disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. Readers are advised to carefully review and consider the risk factors identified in the Management's Discussion and Analysis for period ending December 31, 2015 under the heading "Risk Factors" for a discussion of the factors that could cause Rubicon's actual results, performance and achievements to be materially different from any anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Readers are further cautioned that the foregoing list of assumptions and risk factors is not exhaustive and it is recommended that prospective investors consult the more complete discussion of Rubicon's business, financial condition and prospects that is included in this news release. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

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