P2 Gold completes restructuring of Gabbs payment terms

Mar 22, 2023

2023-03-21 18:37 ET – News Release

Mr. Joseph Ovsenek reports

P2 GOLD CLOSES RESTRUCTURING OF GABBS PAYMENT TERMS

P2 Gold Inc., following the approval of the TSX Venture Exchange, has closed the restructuring of the outstanding payment terms for the acquisition of the Gabbs project, located on the Walker-Lane trend in the Fairplay mining district of Nye county in Nevada. (See the company’s news release dated March 6, 2023, announcing the restructuring of the outstanding payment terms for the acquisition of the Gabbs project.)

In closing the restructuring, the company issued 2,659,748 shares in the capital of the company to Waterton Nevada Splitter LLC, an affiliate of Waterton Precious Metals Fund II Cayman LP.

As part of the restructuring, the company entered into an amending agreement with Waterton pursuant to which the company issued the shares and agreed to pay to Waterton: (a) $150,000 (U.S.) on or before Dec. 31, 2023; (b) $250,000 (U.S.) on or before Dec. 31, 2024; (c) $2-million (U.S.) on or before Dec. 31, 2025; and (d) $2.4-million (U.S.) on or before Dec. 31, 2026. The amending agreement also contemplates: (x) if the company raises, through the issuance of debt or equity, in excess of $7.5-million (Canadian) (excluding flow-through funds), 10 per cent of the funds raised will be paid to Waterton against the longest dated milestone payment; and (y) on the sale of an interest in, or of, Gabbs, the proceeds will be paid to Waterton up to the amount outstanding at the time.

Also as part of the restructuring, the company issued to Waterton a $4-million (U.S.) zero-coupon convertible note, which has been approved by the exchange as part of the restructuring. The note has a four-year term and is convertible at a price of 30 Canadian cents per share provided that the note cannot be converted if all payments due under the amending agreement have been made at the time the note is called (other than if a change of control is to occur prior to repayment of the note). The note can be called at any time on payment of 115 per cent in the first year, 130 per cent in the second year and 150 per cent thereafter, and is due on maturity, an event of default or a change of control. Also, under the note, approval by the shareholders of the company is required if conversion of the note would make Waterton a control person (as defined in the exchange’s corporate finance manual).

All securities issued to Waterton are subject to a four-month hold period expiring July 22, 2023.

Waterton is an insider of the company. The issuance of the shares and note to Waterton is considered a related party transaction subject to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company relied on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(g) and 5.7(1)(e) of Multilateral Instrument 61-101 on the basis that the restructuring transaction is intended to improve the company’s financial position.

About P2 Gold Inc.

P2 Gold is a mineral exploration and development company focused on advancing precious metals and copper discoveries and acquisitions in the Western United States and British Columbia.

We seek Safe Harbor.

https://www.p2gold.com/