Monarca Minerals Inc. Announces Private Placement, Debt Settlement and Share Consolidation /Not for Distribution to United States Wire Services or Dissemination in the United States/
Toronto, May 1, 2017 – Monarca Minerals Inc. (TSXV:MMN) (“Monarca” or the “Company”) announces that it will consolidate its common shares (the "Common Shares") on the basis of one new Common Share for every existing five (5) Common Shares outstanding (the "Consolidation"). In conjunction with the Consolidation, Monarca is pleased to announce that it intends to complete a non‐brokered private placement financing to raise gross proceeds of up to $2.5 million (the “Financing”) and settle $513,024 outstanding debt of the Company through the issuance of post‐Consolidation Common Shares (the “Debt Settlement”).
Financing
Under the Financing, Monarca will issue up to 19,230,769 units (on a post‐Consolidated basis) (the “Units”) at a price of $0.13 per Unit for gross proceeds of up to $2.5 million. Each Unit will be comprised of one post‐Consolidation Common Shares and one common share purchase warrant (a “Warrant”). Each Warrant will entitle the holder to acquire one post‐Consolidation Common Share at a price of $0.18 per share for a period of 36 months from the date of issuance.
The Company intends to use the net proceeds of the Financing to fund its planned activities regarding access and evaluation of the Tejamen project and for general working capital.
Closing of the Financing is expected to occur on or about May 5, 2017 in one or more tranches and remains subject to a number of conditions, including without limitation, receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange (the “Exchange”) and the completion of the Consolidation. The Company may pay finders' fees in connection with the Financing.
Consolidation
Monarca currently has 146,475,695 Common Shares outstanding and, following the Consolidation, will have approximately 29,295,139 Common Shares outstanding before giving effect to the Financing and Debt Settlement. The change in the number of issued and outstanding Common Shares that will result from the Consolidation will not materially affect any shareholder's percentage ownership in Monarca, although such ownership would be represented by a smaller number of Common Shares.
It is expected that the Common Shares will start trading on a post‐Consolidated basis on or about May 4, 2017.
The new CUSIP number will be 60916Q109 and the ISIN number will be CA60916Q1090. The Company will continue to trade under the symbol "MMN". No fractional shares will be issued under the share consolidation, and any fraction will be rounded down to the nearest whole number.
A letter of transmittal will be sent by mail to shareholders advising that the Consolidation has taken effect and instructing shareholders to surrender the certificates evidencing their Common Shares for replacement certificates representing the number of Common Shares to which they are entitled as a result of the Consolidation. Until surrendered, each certificate will be deemed for all purposes to represent the number of Common Shares to which the holder thereof is entitled as a result of the Consolidation.
The Consolidation was approved by the shareholders of Monarca at the annual and special meeting held on July 10, 2016. Further details regarding the Consolidation are contained in the Company's information circular dated May 17, 2016, which has been filed under the Company's profile on SEDAR at www.sedar.com.
The Consolidation remains subject to the final approval of the TSX Venture Exchange.
Debt Settlement
Monarca has entered into agreements with certain of its creditors pursuant to which it has agreed to settle debt in an aggregate amount of approximately $513,024 in exchange for the issuance of an aggregate of approximately 3,946,344 post‐Consolidated Common Shares. The debt settlement will be based at a deemed price of $0.13 per share on a post‐Consolidated basis.
Closing of the Debt Settlement is subject to Exchange approval and completion of the Consolidation.
The Company will close the Financing and the Debt Settlement and issue the securities following approval by the Exchange and completion of the Consolidation. The Common Shares and Warrants issued pursuant to the Financing and Common Shares issued pursuant to the debt settlement will each be subject to a four‐month hold period.
About Monarca Minerals Inc.
Monarca is a Canadian company focusing on the exploration and development of silver projects along a highly productive mineralized belt in Mexico. The Company has a portfolio of silver projects including a mineral resource of 27.8 million ounces of silver (19.8 million tonnes at 45.0 g/t Ag) at its Tejamen deposit.
For further information, please contact:
Allan Folk Interim Chief Executive Officer Monarca Minerals Inc.
Cautionary Note Regarding Forward‐Looking Statements Forward‐Looking Statements:
The above contains forward‐looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward‐looking statements. Factors that could cause such differences include: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government and changes to regulations affecting the mining industry. Forward‐looking statements in this release include statements regarding future exploration programs, operation plans, geological interpretations, mineral tenure issues and mineral recovery processes. Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.