NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES AND NOT FOR DISSEMINATION IN THE UNITED STATES
MONTREAL, Oct. 11, 2018 (GLOBE NEWSWIRE) -- Sentient Executive GP IV, Limited ("Sentient IV") announces that it has filed an early warning report further to its acquisition of an aggregate of 5,604,695 common shares ("Common Shares") of Samco Gold Limited ("Samco") under the Cash Debt Settlement (as defined herein) in exchange for settling the cash debt owing by Samco to Sentient IV in the amount of US$213,333.33.
Background of Samco's Capital Reorganization Transactions
Samco announced on August 14, 2018 an intention to undertake a series of capital reorganization transactions in order to access working capital for continued operations and to better position itself to take advantage of potential changes in business opportunities. These capital reorganization transactions were expected to include (i) a private placement of up to 30,000,000 Common Shares at a price of C$0.05 per Common Share for aggregate gross proceeds of C$1,500,000 (the "Private Placement"), (ii) the conversion of an aggregate of US$587,200 in cash debt owing by Samco to certain related parties (including, for greater certainty, Sentient IV) (the "Cash Debt Settlement"), and (iii) the disposition of certain royalty interests held by Samco to certain related parties (including, for greater certainty, Sentient IV) (the "Convertible Note Settlement" and, together with the Private Placement and Cash Debt Settlement, the "Capital Reorganization Transactions").
Samco announced on October 11, 2018 the closing of (i) the Private Placement, which resulted in the issuance of an aggregate of 15,000,000 Common Shares, and (ii) the Cash Debt Settlement, which resulted in the issuance of an aggregate of 21,031,612 Common Shares.
Sentient IV acquired an aggregate of 5,604,695 Common Shares under the Cash Debt Settlement in exchange for settling the cash debt owing by Samco to Sentient IV in the amount of US$213,333.33. Sentient IV did not subscribe for any Common Shares under the Private Placement
Early Warning Report Disclosure
Immediately prior to the closing of the Private Placement and Cash Debt Settlement, Sentient IV owned or controlled (i) 12,949,200 Common Shares, representing approximately 27.8% of the issued and outstanding Common Shares, on an undiluted basis, and (ii) a convertible promissory note of Samco in a principal aggregate amount of US$500,000 (the "Note"), representing approximately 29.6% of the issued and outstanding Common Shares, on a partially diluted basis (after giving effect to the 12,949,200 Common Shares held by Sentient IV and an additional 1,235,900 Common Shares assuming the full conversion of the principal amount of the Note).
Immediately following the closing of the Private Placement and Cash Debt Settlement, Sentient IV owned or controlled (i) 18,553,894 Common Shares, representing approximately 22.4% of the issued and outstanding Common Shares, on an undiluted basis, and (ii) the Note, representing approximately 23.6% of the issued and outstanding Common Shares, on a partially diluted basis (after giving effect to the 18,553,894 Common Shares held by Sentient IV and an additional 1,235,900 Common Shares assuming the full conversion of the principal amount of the Note).
The Note (as amended) matures on December 31, 2018 and continues to bear interest at a rate of 12% per annum. The principal amount of the Note is convertible, at the option of Sentient IV, into fully paid and non-assessable Common Shares at a conversion price of C$0.50 per Common Share. Interest on the Note can be paid, at the option of Sentient IV, in Common Shares valued at the market price (as that term is defined in the Note) of Common Shares at the time of payment.
Assuming the conversion in full of the principal amount of the Note only, Sentient IV would acquire ownership and control over a maximum of 1,235,900 Common Shares (using the Bank of Canada noon exchange rate on June 26, 2015, as per the terms of the Note), representing approximately 1.5% of the outstanding Common Shares, calculated on a partially diluted basis assuming the full conversion of the principal amount of the Note only. As the number of Common Shares issuable to Sentient IV as payment of interest on the Note is contingent, in part, upon future share prices and exchange rates, the number of Common Shares that Sentient IV could acquire, should it trigger the payment of interest under the Note in Common Shares, cannot be determined as at this time.
Purpose of the Transaction
Sentient IV acquired an aggregate of 5,604,695 Common Shares under the Cash Debt Settlement in exchange for settling the cash debt owing by Samco to Sentient IV in the amount of US$213,333.33. The Cash Debt Settlement allowed Samco to repay the cash debt owing to Sentient IV in the form of Common Shares, as Samco did not have sufficient cash-on-hand to repay such cash debt owing to Sentient IV and may not otherwise have been able to do so.
Sentient IV owns or controls an aggregate of 18,553,894 Common Shares for investment purposes and not with a view to materially affecting control of Samco.
Depending upon market conditions and other factors, Sentient IV may, from time to time, acquire or dispose of additional securities of Samco, in the open market, by private agreement or otherwise, or acquire interests in or enter into related financial instruments involving a security of Samco.
In addition, the principal amount of the Note is expected to be repaid by Samco to Sentient IV pursuant to the Convertible Note Settlement, under which Sentient IV and Mr. Charles Koppel, Chairman and Chief Executive Officer of Samco, are expected to be granted their respective proportional interest in a 1.5% net smelter returns royalty held by Samco on its former El Dorado Monserrat property, and a 2% net smelter returns royalty held by Samco on its former Corina property
Head Office and Contact Information
The head office of Samco is 3 Hanover Square, 4th Floor, London, England, W1S 1HD.
For further information or to obtain a copy of the early warning report filed by Sentient IV, please contact Sue Bjuro at (345) 946-0933.