Euro Manganese Inc. (TSX-V and ASX: EMN; OTCQX: EUMNF; Frankfurt:
E06) (“Euro Manganese” or the "Company") announced today that it
has amended the US$100 million funding package (the “Funding
Package”) with OMRF (BK) LLC ("Orion"), which is managed by the
Orion Resource Partners. The Funding Package, originally announced
on November 28, 2023, supports the development of the Chvaletice
Manganese Project (the "Project") in the Czech Republic, and
consists of a US$50 million Convertible Loan Royalty Agreement (the
"CLRA"), of which US$20 million has been advanced to the Company,
and a US$50 million royalty on Project revenues (the “Royalty
Financing”), subject to the Company meeting certain milestones
related to the development of the Project.
Highlights of the Amendment to the
Funding Package
- The current CLRA
requires the Company pay cash interest to Orion. Based on the
amendment to the CLRA, interest amounts accruing with effect from
January 1, 2025 will be deferred and added to the principal balance
of the convertible loan, conserving US$2.8 million per annum of
cash for the advancement of the Project. The CLRA amendment
interest rate is 14.00%.
- The dates for
certain milestone obligations under the amendments to the CLRA and
Royalty Agreement (the "CLRA and Royalty Amendment") have been
extended to allow for advancement of the Project.
- Euro Manganese
has been granted the right to repay the convertible loan at par at
any time prior to conversion, including all accrued and unpaid
interest, and may cancel the second tranche of the CLRA without
penalty.
- Euro Manganese has been granted the
right to terminate the Royalty Financing at any time prior to the
satisfaction of the conditions precedent for the Royalty Financing
for a fee of US$1 million, provided that the outstanding
convertible loan amounts under the CLRA (and all accrued and unpaid
interest) have been repaid in full at such time.
- Euro Manganese will, subject to TSX
Venture Exchange approval, and in the event certain conditions
precedent are met with respect to future equity fundraising
activities, issue warrants to purchase common shares of the Company
to Orion.
Further details are available in Table 1 of this
news release. All other material terms and conditions of the CLRA
and Royalty Agreement, remain unchanged. Copies of the CLRA and
Royalty Agreement are available on SEDAR+ and a copy of the CLRA
and Royalty Amendment will be filed under the Company's profile on
SEDAR+.
Martina Blahova, Interim CEO of Euro
Manganese, commented:
"We have maintained a strong and collaborative
relationship with Orion and are pleased to have amended the Funding
Package, accommodating the more gradual pace of development within
the EV industry. Our team remains focused on progressing offtake
discussions with potential customers and strategic partners and
managing our resources for the next phase of growth."
About Euro Manganese
Euro Manganese is a battery materials company
focused on becoming a leading producer of high-purity manganese for
the electric vehicle industry. The Company is advancing development
of the Chvaletice Manganese Project in the Czech Republic and
exploring an early-stage opportunity to produce battery-grade
manganese products in Bécancour, Québec.
The Chvaletice Manganese Project is a unique
waste-to-value recycling and remediation opportunity involving
reprocessing old tailings from a decommissioned mine. It is also
the only sizable resource of manganese in the European Union,
strategically positioning the Company to provide battery supply
chains with critical raw materials to support the global shift to a
circular, low-carbon economy.
Euro Manganese is dual listed on the TSXV and
the ASX and is also traded on the OTCQX.
www.mn25.ca
About Orion Resource
Partners
The Orion Resource Partners is an $8 billion
global asset management firm that specializes in institutional
investment strategies in precious and energy transition metals and
minerals. Headquartered in NYC and with offices in Denver, London,
and Sydney, The Orion Resource Partners includes a team of 80
professionals with backgrounds in metals finance, physical metals
logistics and sales, and in-house technical professionals
responsible for risk assessment and portfolio management.
www.orionrp.com
Authorized for release by the Interim CEO of
Euro Manganese Inc.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) or the ASX accepts responsibility for the
adequacy or accuracy of this release.
Enquiries
Martina BlahovaInterim Chief
Executive Officer+1 (604) 681-1010martina@mn25.ca
LodeRock AdvisorsNeil
WeberInvestor and Media Relations – North America+1 (647)
222-0574neil.weber@loderockadvisors.com
Company Address: #709 -700 West Pender St.,
Vancouver, British Columbia, Canada, V6C 1G8
Website: www.mn25.ca
Table 1 – Summary of Key Terms of the Amendment to the
Funding Package
Borrower under CLRA / Grantor under Royalty
Financing: |
Mangan Chvaletice s.r.o. (wholly owned subsidiary of Euro
Manganese) (“Mangan”) |
Guarantor: |
Euro Manganese Inc. |
Structure changes: |
• Orion may not covert the outstanding loan amount into a
royalty for up to a year. • Termination of any rights of
first refusal that Orion may have in relation to any future royalty
or streaming interest in respect of the Project. • Right
of first offer in favour of Mangan in relation to any transfer by
Orion of its loan position prior to the disbursement of the second
tranche payment under the CLRA has now been removed. |
Interest rate: |
14% per annum. |
Interest Capitalization: |
From January 1, 2025, interest amounts due will be accrued and
added to the principal balance of the loan outstanding under the
CLRA and Royalty Amendment conserving US$2.8m per annum of cash for
the advancement of the Project. |
Ability for Euro Manganese to repay and terminate
CLRA: |
Euro Manganese is permitted to repay the CLRA at par, including all
accrued and unpaid interest, and to cancel any further tranches
without penalty, at which date the CLRA shall terminate. |
Ability for Euro Manganese to terminate Royalty
Financing: |
Euro Manganese has right to terminate the Royalty Financing at any
time prior to the satisfaction of the conditions precedent for the
Royalty Financing for a fee of US$1 million, provided that the
outstanding loan amounts under the CLRA (and all accrued and unpaid
interest in accordance with the CLRA and Royalty Amendment) have
been repaid in full. |
Extended timeline for certain obligations: |
• Timelines for satisfaction of certain milestones
including execution of binding offtake term sheets and agreements
for 40% of the Project’s high-purity manganese production for the
first five years of production, securing certain land rights, and
securing a strategic investor have been
extended. • Suspension of certain technical obligations
at the sole discretion of Mangan for up to a year. |
Warrants: |
Subject to regulatory approval and the terms of the CLRA and
Royalty Amendment, Euro Manganese has agreed to issue warrants to
purchase common shares in Company to Orion in the event there is a
future equity fundraising of the Company that meets certain
conditions. The warrants will have the same terms as those issued
under such equity fundraising, if any, and the number of warrants
issued will be based on a pro forma investment in kind of US$1.4
million. |
Forward-Looking Statements
Certain statements in this news release
constitute “forward-looking statements” or “forward-looking
information” within the meaning of applicable securities laws. Such
statements and information involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance, or achievements of the Company, the Project, or
industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements or information. Such statements can be
identified by the use of words such as “may”, “would”, “could”,
“will”, “intend”, “expect”, “believe”, “plan”, “anticipate”,
“estimate”, “scheduled”, “forecast”, “predict” and other similar
terminology, or state that certain actions, events or results
“may”, “could”, “would”, “might” or “will” be taken, occur or be
achieved.
Such forward-looking information or statements
include, but are not limited to, statements regarding the terms of
the CLRA Amendment and the Company’s ability to meet certain
milestones related to the development of the Project, the dates of
certain milestones under the CLRA Amendment being extended, the
interest rate payable under the CLRA Amendment and payment by the
Company of accrued amounts thereof, the Company’s right of
repayment of the convertible loan under the CLRA and cancellation
of the second tranche of the CLRA, the Company’s right to terminate
the Royalty Financing, the Company issuing warrants to purchase
common shares of the Company to Orion and the terms of such
warrants and the status of offtake discussions with potential
customers and strategic partners.
Readers are cautioned not to place undue
reliance on forward-looking information or statements.
Forward-looking statements are subject to a number of risks and
uncertainties that may cause the actual results of the Company to
differ materially from those discussed in the forward-looking
statements and, even if such actual results are realized or
substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on, the Company.
All forward-looking statements are made based on
the Company's current beliefs including various assumptions made by
the Company and information currently available to the Company.
Factors that could cause actual results or events to differ
materially from current expectations include, among other things:
risks and uncertainties related to the ability to obtain, amend, or
maintain necessary licenses, or permits; risks related to
acquisition of surface rights; risks related to granting security;
securing sufficient offtake agreements; the availability of
acceptable financing for developing and advancing the Project and
for continued operations; the availability and reliability of
equipment, facilities, and suppliers necessary to complete
development; the ability to develop adequate processing capacity
with expected production rates; timing to start of production and
total costs of production; the presence of and continuity of
manganese at the Project at estimated grades; the potential for
unknown or unexpected events to cause contractual conditions to not
be satisfied; developments in EV (Electric Vehicles) battery
markets and chemistries; and risks related to fluctuations in
currency exchange rates, changes in laws or regulations; and
regulation by various governmental agencies. For a further
discussion of risks relevant to the Company, see "Risk Factors" in
the Company's annual information form for the year ended September
30, 2023, available on the Company's SEDAR+ profile at
www.sedarplus.ca.
Although the forward-looking statements
contained in this news release are based upon what management of
the Company believes are reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with these
forward-looking statements. These forward-looking statements are
made as of the date of this news release and are expressly
qualified in their entirety by this cautionary statement. Subject
to applicable securities laws, the Company does not assume any
obligation to update or revise the forward-looking statements
contained herein to reflect events or circumstances occurring after
the date of this news release.
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