Business
Debut Diamonds Announces Engagement of KWG as Sales Agent, Board Changes, Private Placement, and Sale of Control
Toronto, Ontario--(Newsfile Corp. - November 26, 2018) - Debut Diamonds Inc. ("Debut Diamonds" or the "Company") today announced a series of transactions, inclu
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[{"type":"text","content":" Toronto, Ontario--(Newsfile Corp. - November 26, 2018) - Debut Diamonds Inc. (\"Debut Diamonds\" or the \"Company\") today announced a series of transactions, including the engagement of KWG Resources Inc. (CSE: KWG) (\"KWG\") as its exclusive agent to source buyers for its various diamond mineral resource properties, changes to its board of directors, a proposed private placement, a proposed conversion of debt into common shares of the Company (\"Common Shares\"), and the sale by KWG of all of the Common Shares that it previously held in Debut Diamonds (collectively, the \"Transactions\"). The Transactions are each described in further detail below. Sales Agent Agreement The Company has executed an Exclusive Sales Agent Agreement with KWG effective as of November 25, 2018 (the \"Sales Agent Agreement\"). Under the terms and conditions of the Sales Agent Agreement, KWG will actively market the Company's interests in various diamond mineral resource properties (collectively, the \"Properties\") to arm's-length buyers. If a buyer introduced by KWG to the Company acquires one of the Properties, then the Company will pay a commission to KWG of 5% of the net sales price applicable to such Property. In addition, KWG has agreed to assume all of the Company's obligations and liabilities in relation to the Properties, and will indemnify the Company from any losses it may suffer as a result of any matter respecting the Properties. Following the sale of all of the Properties, Debut intends to declare a dividend to its holders of Common Shares of record as of November 23, 2018 equal to approximately the aggregate net sales price of the Properties, exclusive of KWG's commission and related fees and taxes. KWG is considered a \"control person\" of the Company under applicable securities laws. Accordingly, the Sales Agent Agreement is considered a \"related party transaction\" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (\"MI 61-101\"). However, the execution of the Sales Agent Agreement and the transactions contemplated thereby are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the services anticipated to be provided by KWG under the Sales Agent Agreement, nor the fair market value of its anticipated co...