MONTREAL, June 01, 2018 (GLOBE NEWSWIRE) — Falco Resources Ltd. (TSX-V:FPC) (“Falco” or the “Company”) is pleased to announce that in connection with the C$10 million loan (“Loan”) provided by Osisko Gold Royalties Ltd (TSX:OR) (“Osisko”) on May 30, 2016, as amended, that both Falco and Osisko have agreed to extend the maturity to December 31st, 2018.
As per the Loan, Falco and Osisko shall negotiate in good faith the terms, conditions and form of a silver and/or gold stream agreement (“Stream Agreement”), which shall be substantially in the form typical for such transaction in the industry, whereby Osisko may provide Falco with a portion of the development capital required to build the Horne 5 Project (“Stream”). In this case, the principal amount of the Loan and any accrued interest will be applied against the Stream deposit. No interest shall accrue on principal amount as from June 1st, 2018 unless Osisko and Falco fail to enter into a Stream Agreement by August 30, 2018, in which case interest shall accrue retroactively from and after June 1st, 2018. Accrued interest shall be payable upon repayment of the principal amount when due.
Notwithstanding the original terms of the Loan, in the event that on the maturity date or the earlier date on which Osisko makes a demand for payment of the Loan, should Falco and Osisko not have entered into a Stream Agreement, Osisko will have the option to request the Loan to be paid in cash together with the accrued and unpaid interest or to be granted a 1% net smelter return royalty on the Horne 5 Project and accrued interests will be paid in cash.
Under certain events of default, Osisko may, at its option, require the repayment of the principal amount and the accrued interest in cash.
The extension and amendment to the Loan are considered a “related party transaction” under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (“Regulation 61-101”). The extension and amendment to the Loan are exempt from the requirements to obtain a formal valuation pursuant to the exemption in section 5.5(b) of Regulation 61-101, as the shares of the Company are not listed on a specified market, and are exempt from minority shareholder approval pursuant to section 5.7(1)(f) of Regulation 61-101, as the Loan does not have an equity or voting component and is on reasonable commercial terms that are not less advantageous to the Company than if the Loan was obtained from an arm’s length party.
Falco Resources Ltd. is one of the largest mineral claim holders in the Province of Québec, with extensive land holdings in the Abitibi Greenstone Belt. Falco owns about 67,000 hectares of land in the Rouyn-Noranda mining camp, which represents approximately 70% of the entire camp and includes 13 former gold and base metal mine sites. Falco’s principal asset is the Horne 5 Project located in the former Horne mine that was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties Ltd is the largest shareholder of the Company and currently owns 12.7% of the issued and outstanding shares of the Company. The Company has 188,957,863 shares issued and outstanding.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
For further information contact:
Chief Financial Officer
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as “plans”, “expects’, “estimates”, “intends”, “anticipates”, “believes” or variations of such words, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will be taken”, “occur” or “be achieved”. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include the reliability of the historical data referenced in this press release and those risks set out in Falco’s public documents, including in each management discussion and analysis, filed on SEDAR at www.sedar.com. Although Falco believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, Falco disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.