Canada Silver Cobalt Works Inc. intends to reprice an aggregate of 3,997,333 outstanding common share purchase warrants issued pursuant to a private placement that closed on Nov. 25, 2020. The warrants have an exercise price of 80 cents and an expiry date of Nov. 27, 2022. The company will amend the warrant exercise price to 11.25 cents per share and extend the warrant expiry date by two years to Nov. 27, 2024.
The warrants, as amended, will be subject to an accelerated expiry provision such that if for any 10 consecutive trading days during the unexpired term of the warrants, the closing price of the company’s shares on the TSX Venture Exchange exceeds 14 cents, representing the amended warrant exercise price of 11.25 cents plus 25 per cent, the exercise period of the warrants will be reduced to 30 days, starting seven days after the last premium trading day. The company will announce any such accelerated expiry date by press release. All other terms of the warrants remain unchanged.
The amendments described above are subject to approval by the holders of the warrants and by the TSX Venture Exchange.
Warrant exercise incentive program
The company also announces that if it obtains warrant amendment approval, the company will institute a warrant exercise incentive program designed to encourage the early exercise of the 3,997,333 warrants. Under the incentive program, the company will offer an inducement to each warrant holder that exercises its warrants during a period of 30 days from receipt of warrant amendment approval, by the issuance of one additional common share purchase warrant for each warrant exercised during the 30-day period. Each incentive warrant will entitle the holder to purchase one additional common share of the company at a price of 15 cents for a period of one year from the date of warrant amendment approval.
The incentive program will commence upon receipt of warrant amendment approval and will expire 30 days thereafter at 4 p.m. Vancouver time. The incentive warrants will include an accelerated expiry provision such that if, for any 10 consecutive trading days during the one-year term of the incentive warrants, the closing price of the company’s shares on the TSX Venture Exchange is at least 15 cents, the exercise period of the incentive warrants will be reduced to 30 days. The company will announce any such accelerated expiry date of the incentive warrants by press release.
The company intends to issue an updating news release upon receipt, if any, of warrant amendment approval and commencement of the incentive program, outlining the terms and conditions and the method of exercising warrants pursuant to the incentive program.
The incentive program is subject to approval by the TSX Venture Exchange.
About Canada Silver Cobalt Works Inc.
Canada Silver recently discovered a major high-grade silver vein system at Castle East located 1.5 kilometres from its 100-per-cent-owned, past-producing Castle mine near Gowganda in the prolific and world-class silver-cobalt mining district of Northern Ontario. The company has completed a 60,000-metre drill program aimed at expanding the size of the deposit with an update to the resource estimate under way. In May, 2020, based on a small initial drill program, the company published the region’s first National Instrument 43-101 resource estimate that contained a total of 7.56 million ounces of silver in inferred resources, comprising very high-grade silver (8,582 grams per tonne uncut or 250.2 ounces per ton) in 27,400 tonnes of material from two sections (1A and 1B) of the Castle East Robinson zone, beginning at a vertical depth of approximately 400 metres. Note that mineral resources that are not mineral reserves do not have demonstrated economic viability. Please refer to Canada Silver press release dated May 28, 2020, for the resource estimate, report reference: M. Rachidi, 2020, “NI 43-101 Technical Report Mineral Resource Estimate for Castle East, Robinson Zone, Ontario, Canada,” with an effective date of May 28, 2020, and a signature date of July 13, 2020. The company also has: (1) 14 battery metal properties in Northern Quebec, where it has recently completed a nearly 15,000-metre drill program on the Graal property; and (2) the prospective 1,000-hectare Eby-Otto gold property close to Agnico Eagle’s high-grade Macassa mine near Kirkland Lake, Ont., where it will be exploring in 2022. Canada Silver’s flagship silver-cobalt Castle mine and 78-square-kilometre Castle property feature strong exploration upside for silver, cobalt, nickel, gold and copper. With underground access at the fully owned Castle mine, an exceptional high-grade silver discovery at Castle East, a pilot plant to produce cobalt-rich gravity concentrates, a processing facility (TTL Laboratories) in the town of Cobalt and a proprietary hydrometallurgical process known as Re-2Ox (for the creation of technical-grade cobalt sulphate, as well as nickel-manganese-cobalt (NMC) formulations), Canada Silver is strategically positioned to become a Canadian leader in the silver-cobalt space.