Business
Baker Steel Granted Unkur Option and Converts Loan to Settle Debt
VANCOUVER, BC / ACCESSWIRE / June 14, 2022 / AZARGA METALS CORP. (" Azarga Metals " or the "...
About this update from Azarga Metals Corp.
[{"type":"text","content":"Baker Steel Granted Unkur Option and Converts Loan to Settle DebtVANCOUVER, BC / ACCESSWIRE / June 14, 2022 / AZARGA METALS CORP. (\"Azarga Metals\" or the \"Company\") (TSXV:AZR) is pleased to announce that it has closed the agreement (the \"Agreement\") with Baker Steel Resources Trust Limited (\"BSRT\") announced on April 19, 2022. Pursuant to the Agreement, Azarga Metals has granted BSRT the option to acquire Azarga Metal's Unkur project (the \"Unkur Option\") until December 31, 2023 (the \"Unkur Option Period\"), after which the Unkur Option will automatically expire.Upon closing the Agreement, BSRT exercised its right to convert the US$3.5 million loan (the \"Loan\") made under the secured convertible loan facility (the \"Loan Agreement\") between Azarga Metals and BSRT. The Loan was converted at a fixed Canadian dollar equivalent value of C$4.7 million, with a conversion price of C$0.10 per share for a total issue of 46,925,500 common shares of the Company (the \"Shares\").The Unkur Option is exercisable at an exercise price of US$1.00 from the date of termination of the Loan Agreement, being June 14,, 2022 until December 31, 2023, after which, if not previously exercised by BSRT, the Unkur Option will automatically expire.The Company will use its best efforts (while recognizing that sanctions and other force majeure circumstances may prevent these efforts), to maintain the corporate existence of its subsidiaries and its licences, including the Unkur project, located in the Zabaikalskiy Region of eastern Russia, on a care and maintenance basis during the Option Period.If the Unkur Option is exercised by BSRT and Unkur is subsequently sold to an arms length third party within 2 years of the date of the exercise of the Unkur Option by BSRT, proceeds from the sale of the Unkur project will be shared between the Company and BSRT based on an agreed upon formula. The proceeds from a sale will be paid to the Company and BSRT as follows: (1) the Company will be reimbursed the cost of care and maintenance until the Unkur Option is exercised, (2) BSRT will be reimbursed the cost of care and maintenance incurred from the date of the Unkur Option exercise to the date of the sale to a third party, (3) BSRT will be paid US$3.5 million and (4) BSRT and the Company will share any residual consideration on an 80%/20% basis respectively.Pu...