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Maxim Power Corp. Announces that it has Closed the Sale of Summit Coal
CALGARY, Alberta, April 29, 2025 (GLOBE NEWSWIRE) -- Maxim Power Corp. ("MAXIM" or the "Corporati...
About this update from Maxim Power Corp.
[{"type":"text","content":"Maxim Power Corp. Announces that it has Closed the Sale of Summit Coal\n\n\n\n CALGARY, Alberta, April 29, 2025 (GLOBE NEWSWIRE) -- Maxim Power Corp. (\"MAXIM\" or the \"Corporation\") (TSX: MXG) announces today that it has closed the previously announced sale of 100% of its interest in its wholly-owned subsidiaries Summit Coal Limited Partnership and Summit Coal Inc. (collectively “Summit”) to Valory Resources Inc. (“Valory”) for $14.2 million, consisting of $10.2 million of cash and $4.0 million of equity securities in the form of a 15% interest bearing note convertible into Valory common shares (the “Convertible Note”).\n \n\n The Convertible Note matures on April 29, 2027, and is convertible at MAXIM’s election into common shares of Valory upon a convertible event, being a sale, equity raise or maturity and converts at a 30% discount to the corresponding share valuation at the event. Summit was sold with $2.2 million of restricted cash, resulting in net cash proceeds to MAXIM of $8.0 million. The Convertible Note may be redeemed by Valory at any time.\n \n\n On April 29, 2025, MAXIM and Summit entered into an agreement such that MAXIM will receive a 3% royalty on any raw coal volume produced from the coal leases currently owned by Summit, including any volumes from Summit’s Mine 14 project. The royalty will be calculated using a Premium Low Vol Hard Coking Coal benchmark and will be paid in United States dollars. The amount and timing of any royalty payments is contingent on the commencement of production and there is no certainty as to if, or when, production may begin.\n \n\n Additionally on April 29, 2025, MAXIM, through it’s wholly-owned subsidiary Milner Power Inc. (“Milner”), entered into a ground lease at the Milner site, with a nominee of Valory, to allow for construction and operation of a coal processing facility. The term of the ground lease is twelve years commencing on April 29, 2025, however, it is subject to automatic termination if the coal processing facility has not been substantially completed within two years. Lease payments to Milner consist of both a prorated annual $2.1 million fixed payment and a variable throughput payment subject to coal being processed through the leased lands. The variable throughput payment has the ...