Le Lézard
Classified in: Mining industry, Business
Subject: TNM

Syndication of Convertible Loan Facility


/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, July 7, 2020 /CNW/ - Pala Investments Limited ("Pala"), a multi-strategy investment company focused on the mining and metal value chain, has successfully syndicated US$13,400,000 of the principal amount of the US$30,000,000 convertible loan facility entered into between Nevada Copper Corp. (the "Company") and Pala on March 27, 2020 (the "Convertible Loan") to an affiliate of Castlelake, L.P ("Castlelake") (the "Transaction"). Details of the Convertible Loan were described in Pala's press releases dated March 30, 2020 and April 7, 2020.

Syndication of Convertible Loan

On July 7, 2020 Pala syndicated an aggregate principal amount of US$13,400,000 of the Convertible Loan to Castlelake in accordance with the transfer provisions thereof. Following the completion of the Transaction, Pala continues to hold an aggregate principal amount of the Convertible Loan equal to US$19,684,055 (which amount is inclusive of all original principal and capitalized fees and interest as of the date hereof). Pala received cash consideration in the amount of US$12,472,600 (equivalent to C$16,891,642 based on the Bank of Canada exchange rate as of the close of business July 6, 2020 equal to US$1 = C$1.3543) from Castlelake in connection with the Transaction.

As noted in the prior press releases, Pala may, at any time, and from time to time, convert all or a portion of the principal amount of the Convertible Loan, plus any accrued interest thereon, into common shares of the Company ("Common Shares") at a price per Common Share equal to C$0.1575 (the "Conversion Price"). The Convertible Loan bears interest at the rate of 14% per annum, quarterly in arrears. The Company has the option to pay such interest in cash if permitted by the Company's senior credit facilities. In the event the Company elects not to pay such interest in cash, the lenders thereunder have the option to either: (i) receive the amount of such interest payment through the issuance of Common Shares based on the market price (as such term is defined in the policies of the TSX) of the Common Shares at the time of such interest payment; or (ii) add the amount of such interest payment to the then outstanding principal amount of the Convertible Loan held by such lender (which shall thereafter accrue interest at the interest rate under the Convertible Loan), in which case such interest will either be repaid on maturity of the Convertible Loan or converted into Common Shares at the Conversion Price. The Convertible Loan is also repayable subject to a make whole amount, whereby the lenders will receive the balance of all remaining interest amounts to the end of the full term of the Convertible Loan, upon certain change of control events.

Pala's Common Share Ownership

Immediately prior to the Transaction, Pala held an aggregate of 332,179,447 Common Shares, representing approximately 40.52% of the issued and outstanding Common Shares on a non-diluted basis. Immediately following completion of the Transaction, Pala continues to hold the same number of Common Shares and the same percentage of the issued and outstanding Common Shares on a non-diluted basis.

The aggregate number of Common Shares that may be held by Pala both immediately prior to and immediately following the Transaction is set out in the table below which, in each case, assumes the exercise in full of the Convertible Loan held by Pala at the Conversion Price (assuming all interest under the Convertible Loan is capitalized and converted at maturity at the Conversion Price) (collectively, the "Pala Issuances"):


Total number of Common Shares issued to Pala pursuant to Pala Issuances(1)

Total number of Common Shares held by Pala assuming Pala Issuances

% of Common Shares owned by Pala assuming Pala Issuances(1) , (2)

Immediately Prior to the Transaction

478,701,136

811,880,583

62.5%

Immediately Following the Transaction

284,813,030

617,992,477

55.9%



(1)

amount related to the exercise of Convertible Loan based on the Bank of Canada exchange rate as of the close of business July 6, 2020 (US$1 = C$1.3543)

(2)

assumes conversion of the Convertible Loan by Pala only (assuming all interest related to Pala's portion of the Convertible Loan is capitalized and converted at maturity at the Conversion Price)

As per above, as a result of the Transaction, on a partially diluted basis taking into account the foregoing assumptions, the change in Pala's ownership interest in Common Shares has decreased by 6.6%.

Furthermore, Pala may acquire additional Common Shares pursuant to the backstop agreement entered into on March 27, 2020 (the "Backstop") among the Company, Pala and Triple Flag Mining Finance Bermuda Ltd., however the price per Common Share to be paid by Pala in connection therewith has not been determined and it is therefore not possible to determine the number of Common Shares that may be issuable to Pala in connection with the Backstop.

Pala and Castlelake have relied on the private agreement exemption in accordance with Section 4.2(1) of National Instrument 62-104 ? Take-Over Bids and Issuer Bids as the Transaction may result in Castlelake holding an aggregate amount of Common Shares that is greater than 20% of the outstanding Common Shares. Such exemption is available with respect to the Transaction due to the fact that (a) the purchase of the Convertible Loan by Castlelake was made from Pala alone and not from more than 5 persons in the aggregate, (b) no bid was made by Castlelake to purchase the Convertible Loan or Common Shares generally to security holders of either such class of securities and (c) the value of the consideration paid by Castlelake to Pala is not greater than 115% of the market price of such portion of the Convertible Loan.

Pala entered into the Transaction for investment purposes and may increase or decrease the investment in the securities of the Company depending on its evaluation of the business, prospects and financial condition of the Company, the market for the Company's securities, general economic and tax conditions and other factors.

The Common Shares are listed on the TSX under the symbol "NCU". Nevada Copper Corp. is a corporation organized under the laws of British Columbia with its head office at Suite 598 ? 999 Canada Place, Vancouver, British Columbia, Canada V6C 3E1. Pala is a company existing under the laws of Jersey and its address is 12 Castle Street, St. Helier, Jersey JE2 3RT.

About Pala

Pala is an investment company focused exclusively on the mining sector with a strong track record of successful investments and value creation. Pala's team has extensive experience within the sector and seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative solutions in development, production, turnaround and advanced exploration situations. Pala invests across all geographies and in all mining commodities as well as mining services and consumables. For more information, visit www.pala.com.

SOURCE Pala Investments Limited


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