Sotkamo Silver Owner of mineral deposits

SWEDEN
2019
SELL-SIDE

Energy & renewables Industry

Business description: Mining of silver and other natural resources.

Deal value: 1 – 5m

SOTKAMO SILVER AB HAS DECIDED TO IMPLEMENT A DIRECTED NEW ISSUE ON SHARES AND CONVERTIBLES FOR A MORE OF SEK 29.37

Share issue: The Board of Directors of Sotkamo Silver AB (publ) (the ” Company “) has today decided, with the support of the authorizing board received at the Annual General Meeting on April 11, 2019, on a directed issue of a maximum of 4,200,000 shares at a subscription price of 3.60 SEK per share.

The right to subscribe for the shares shall, with deviation from the shareholders’ preferential rights, be added to a limited professional investor who has previously announced an interest in subscribing for shares.

Subscription of the shares shall be made on the subscription list no later than May 14, 2019. Payment for subscribed shares shall be paid in cash no later than May 14, 2019. The Board has the right to extend the time for subscription and payment. If the issue is fully subscribed, the Company will be allocated SEK 15,120,000 before issue costs.

The subscription price has been determined after negotiation with the subscribers on the basis of the quoted price for the company’s shares and the required issue discount in order to carry out the issue.

Convertible bond issue: The Company’s Board of Directors has resolved, with the support of the authorizing board received at the Annual General Meeting on April 11, 2019, to issue convertibles with a total nominal value of no more than SEK 15,000,000, divided into 15 convertibles, each with a nominal value of 1 SEK 000 000. The issue price for the convertibles amounts to 95% of the nominal amount of the convertibles, a total of SEK 14,250,000.

Subscription of convertibles shall be made on the subscription list no later than May 10, 2019. Payment for subscribed convertibles shall be paid in cash by May 10, 2019. The Board of Directors has the right to extend the time for subscription and payment.

The loan runs at a quarterly rate of three (3) percent. The loan becomes due on May 31, 2020, to the extent that no conversion has taken place before, or the loan has been repaid in accordance with the convertible terms. The Company shall have the right, from 1 January 2020 to 31 May 2020, to redeem, in whole or in part, all or part of the Convertible Debt at an amount of 100% of their nominal amount plus accrued interest on such Convertible Claim.

From 1 May 2020 until 31 December 2020, convertible holders are entitled to convert all or part of their receivable for new shares in the company at a conversion price corresponding to 90% of the volume-weighted average payment price for the company’s share on NGM Equity during a period of ten trading days almost before the request for conversion was received by the company, but at least SEK 1,4441. If the conversion rate, calculated as above, is less than SEK 1,4441 when the convertible debenture holder requests conversion of convertible debentures, the proprietor is entitled to compensation for the difference in cash.

The right to subscribe for the convertibles shall, with deviation from the shareholders’ preferential right, be added to a professional investor who has previously expressed interest in subscribing for convertibles.

The conversion price has been determined after negotiation with the subscriber on the basis of the quoted price for the company’s shares and the required issue discount in order to carry out the issue.

The rationale for the issues:

The reason for the issues and the reasons for deviating from the shareholders’ preferential rights is the company’s need to strengthen the cash position as a result of the investments stemming from Silvergruvan’s start of production and increased capital requirements due to the increased production capacity during the first half of 2019. To quickly strengthen the company cash is important for the company’s operations and its development.

The issues:
At the time of publication of this press release, the company has received notifications for subscription from professional investors for both issues corresponding to the maximum amounts for the above. Thus, the questions are initially fully subscribed to.

The directed share issue represents a maximum dilution effect of approximately 3.1 percent based on the number of shares in the Company after the directed share issue.

Advisor:
MAWW Stockholm is the financial advisor, A1 Attorneys are the legal advisor to Sotkamo Silver AB. Hagberg & Aneborn Fondkommission AB and Evli Pankki Oyj are issuers in the rights issue.