Chilean Metals Announces Debt Agreement

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[{"type":"text","content":"Chilean Metals Announces Debt Agreement\n \n \n (TheNewswire)\n \n \n \n Toronto, ON - TheNewswire - October\n \n \n 9\n \n \n , 2020.\n \n \n Chilean\nMetals Inc. (\"Chilean Metals,\" \"CMX\" or the\n\"Company\") (TSXV:CMX) (SSE:CMX) (MILA:CMX)\n \n \n (OTC:CMETF)\n \n \n has entered into an\nagreement with a related party on the extension of $702,000 worth of\ndebentures and advances (that are otherwise due or past due) for a\nfurther term of two years. This amended loan agreement and bonus\nwarrants (described below) is subject to TSXV approval. The loan will\ncarry an interest rate of 14% per annum and will be prepaid for year\n1, with the interest added to the principal. Should Chilean Metals not\npay off the debenture during year 2, the loan will carry forward\ninterest only in arrears and be due on October 8, 2022.\n \n \n \n \n In consideration of the extension, the related party\nwill be granted 5,000,000 bonus warrants, exercisable at $0.14 per\nshare for a period of 2 years.\n \n \n \n \n \"Our largest shareholder has participated in the\nequity round we just closed and this investment combined with the\nexercise of these warrants would give him a non-diluted ownership\nposition of 16.7%. The shareholder could not take all equity in this\nmost recent round as it would have put him significantly over the 20%\nthreshold beyond which a takeover bid is required. We are comfortable\nthat these terms are fair to the Company and to this shareholder. The\ncombination of the Debenture and the equity financing places the\nCompany in the best financial condition it has been in some\nyears,\" commented Chilean Metals CEO Terry Lynch.\n \n \n \n \n The debt agreement and proposed issuance of bonus\nwarrants is considered a related party transaction because it is being\nconducted with an insider of the Company.\n \n \n The\nrelated party transaction is anticipated to be exempt from formal\nvaluation requirements and minority shareholder approval pursuant to\nthe exemptions contained in Sections 5.5(1)(b) and 5.7(1)(a) of MI\n61-101\n \n \n .\n \n \n \n \n CMX wishes to acknowledge that the TSXV has provided\nfinal approval to the previously announced $\n \n \n 3,017,525 financing (the \"Offering\"). Certain\ninsider and officers of the Company did participate in the offering.\n \n \n Their participation in the Offering is\nconsider...

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