The principal terms of the Agreement, as recently amended, are as follows:
- The purchase price for the shares in NECC is
US$1 , with NECC issuing a secured note ("NECC Note") to Cline equal to the USD equivalent ofC$55 million ("CDN Debt"), with reductions for the value of Allegiance common shares issued to Cline on closing ("Allegiance Shares") and amounts advanced or obligations assumed by Allegiance to support NECC care and maintenance costs sinceAugust 2019 ("C&M Payments and Obligations"); - The CDN Debt was converted to USD at a USD/CAD FX rate of
$0.7628 , resulting in a USD equivalent of$41,952,707.86 ; - On closing Cline received the Allegiance Shares, being
US$4 million in Allegiance common shares at a price ofA$0.08 per share and subject to a 12-month hold period, representing 70,651,405 shares and based on a USD/AUD FX rate of$0.7077 ; - The C&M Payments and Obligations totalled
US$2,832,0374 ; - After adjusting for the Allegiance Shares and the C&M Payments and Obligations, the principal amount of the NECC Note received by Cline on closing is
US$35,120,670.84 ; - The NECC Note will be repaid as follows:
US$3 million paid in cash on the release of the NECC reclamation bonds held by theColorado Division of Reclamation , Mining and Safety from the current bonds of approximatelyUS$5.5M (Allegiance has secured up toUS$10 million of insurance mine reclamation bonding to replace the existing bonds); the cash release is expected within 90 days of closing;US$6 million upon the commencement of commercial production by NECC or byDecember 1, 2021 , whichever is earlier;- The remainder of the NECC Note to be repaid by Cline receiving 60% of NECC's retained earnings after NECC makes prudent provision for any preferred debt payments and obligations, and sustaining and working capital, until the NECC Note is paid in full, but in any event within 10 years of closing. The NECC Note will not bear interest.
- The NECC Note is secured against the assets of NECC and subject only to indebtedness and security granted in respect of the preferred debt issued by NECC to a maximum of
US$40 million .
About Allegiance
Allegiance is a publicly listed (ASX: AHQ) Australian company advancing a metallurgical coal mine into production in
About
Marret specializes in fixed income and particularly in high-yield debt strategies.
Forward-looking information
This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions "seeks", "expects", "believes", "estimates", "will", "target" and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of Marret and the managers of the underlying portfolios regarding future results or events and are based on information currently available to them. Certain material factors and assumptions were applied in providing these forward-looking statements. All forward-looking statements in this press release are qualified by these cautionary statements. Marret believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, Marret can give no assurance that the actual results or developments will be realized. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks Factors" in the annual information forms of MHY and MMF dated
SOURCE
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