DENVER, June 28, 2018 /CNW/ – Resource Capital Fund V L.P. (“RCF V“) and Resource Capital Fund VI L.P. (“RCF VI” and, together with RCF V, “RCF“) announce that, on June 28, 2018, pursuant to an option agreement dated July 31, 2017 between RCF and the Pacific Road Resources Funds (“PRRF“), RCF has exercised its option (the “Option“) to acquire all of PRRF’s 13,127,984 common shares (“Common Shares“) in the capital of First Bauxite Corporation (the “Corporation“) and all of PRRF’s C$9,847,901 aggregate principal amount of Notes (“Notes“) of the Corporation, for an aggregate exercise price of US$3,000,000. RCF VI previously paid US$750,000 to PRRF in exchange for the Option.

Pursuant to the exercise of the Option, RCF VI acquired all of the 13,127,984 Common Shares held by PRRF, representing approximately 11.17% of the currently issued and outstanding Common Shares, and C$9,847,901 aggregate principal amount of Notes. The Notes can be converted into Common Shares at a conversion price of C$0.10. If fully converted, the principal amount of the Notes would be convertible into 98,479,010 Common Shares.

Prior to exercising the Option, RCF (together with RCF Management L.L.C.) collectively owned and controlled 53,524,211 Common Shares, representing approximately 45.53% of the issued and outstanding Common Shares on an undiluted basis, and C$8,000,000 and US$19,422,861 aggregate principal amount of Notes. Assuming the exercise of the Notes held by RCF prior to the exercise of the Option, RCF would own and control 392,664,022 Common Shares, representing approximately 85.98% of the Common Shares on a partially diluted basis.

As of the exercise of the Option, RCF (together with RCF Management L.L.C.) collectively owns and controls an aggregate of 66,652,195 Common Shares, representing approximately 56.69% of the currently issued and outstanding Common Shares on an undiluted basis and C$17,847,901 and US$19,422,861 aggregate principal amount of Notes. Assuming conversion in full of the aggregate principal amount of the Notes on the date hereof at a conversion price of C$0.10, the aggregate principal amount of Notes held by RCF is convertible into 437,618,821 Common Shares, plus accrued interest. Assuming conversion in full of the aggregate principal amount of the Notes as described above, RCF would hold an aggregate of 504,271,016 Common Shares, representing approximately 90.83% of the Common Shares issued and outstanding on a partially diluted basis.

The Option was exercised for investment purposes. RCF evaluated its investment in the Corporation, and based on such evaluation of market conditions and other circumstances, elected to increase its shareholdings in the Corporation. RCF may from time to time acquire additional securities, dispose of some or all of the existing or additional securities or may continue to hold the securities of the Corporation.

The acquisition by RCF VI of Common Shares and Notes in connection with the exercise of the Option was completed pursuant to the “private agreement exemption” set out in Section 4.2 of National Instrument 62-104 – Take-Over Bids and Issuer Bids. RCF is entitled to rely on this exemption as: (a) purchases were made from not more than 5 persons in the aggregate; (b) the bid was not made generally to securityholders of the Common Shares and Notes; and (c) the consideration paid for the Common Shares and the Notes is not greater than 115% of the market price of such securities.

SOURCE Resource Capital Fund VI L.P.