Fortune Minerals Announces Second Draw From Convertible Securities Agreement With The Lind Partners

Rhea-AI Summary

Fortune Minerals (FTMDF) has drawn down an additional C$1,575,000 from its convertible security funding agreement with Lind Global Fund II, LP. The Second Convertible Security has a two-year term and a face value of C$1,890,000, secured by company assets. The funds will support general working capital and pre-fund government-supported work on the NICO Cobalt-Gold-Bismuth-Copper Critical Minerals Project.

Lind can convert the face value over 24 months at 85% of the five-day VWAP. The agreement includes a C$60,000 closing fee and 16,338,174 warrants at C$0.0609 per share, exercisable for 60 months. The NICO Project aims to provide North American supply of cobalt sulphate, gold doré, bismuth ingots, and copper cement.

Positive

• Secured additional C$1,575,000 in funding for working capital
• Government support for NICO Project development
• Project aims to establish domestic supply chain for critical minerals

Negative

• Potential shareholder dilution through convertible security conversion
• Additional debt secured against company assets
• Shares will be converted at 15% discount to market price

Proceeds to provide working capital & pre-fund government supported work programs

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

LONDON, Ontario--(BUSINESS WIRE)-- Fortune Minerals Limited (TSX: FT) (OTCQB: FTMDF) (“Fortune” or the “Company”) (www.fortuneminerals.com) is pleased to announce that it has drawn down an additional C$1,575,000 (the “Second Convertible Security”) from its convertible security funding agreement with Lind Global Fund II, LP, managed by The Lind Partners (together, “Lind”) (see news release dated May 22, 2024). The proceeds from this Second Convertible Security drawdown will be used for general working capital purposes and to pre-fund some of the government supported work on the vertically integrated NICO Cobalt-Gold-Bismuth-Copper Critical Minerals Project (“NICO Project”) (see news releases dated, May 16, 2024, and December 5, 2023). Development of the NICO Project would provide a reliable North American supply of cobalt sulphate, gold doré, bismuth ingots, and copper cement enhancing domestic supply chains for three Critical Minerals with a highly liquid and countercyclical gold co-product to mitigate metal price volatility.

The Second Convertible Security has a two-year term, a face value of C$1,890,000 and is secured by a lien against the Company’s assets. Lind will be entitled to incrementally convert the face value amount of the Second Convertible Security over a 24-month period, subject to certain limits, at a conversion price equal to 85% of the five-day trailing volume weighted average price of Fortune’s shares (“VWAP”) prior to the date of conversion. Commencing 60 days after the shares issuable under this convertible security become free trading, Fortune has the right to repurchase the Second Convertible Security, subject to Lind’s option to convert up to one third of the face value into Fortune common shares prior to such repurchase at a conversion price equal to 85% of the 5-day VWAP. Lind will also receive a closing fee of C$60,000 and 16,338,174 common share purchase warrants at an exercise price of $0.0609 per common share for 60 months from the date of issuance after closing.

This press release shall not constitute an offer to sell or solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements.

About The Lind Partners:

The Lind Partners manages institutional funds that are leaders in providing growth capital to small- and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind’s multi-strategy funds make direct investments ranging from US$1 to US$30 million, invest in syndicated equity placements and selectively buy on market. Having completed more than 200 direct investments totaling over US$2 billion in transaction value, Lind’s funds have been flexible and supportive capital partners to investee companies since 2011.

About Fortune Minerals:

Fortune is a Canadian mining company focused on developing the NICO cobalt-gold-bismuth-copper critical minerals project in Canada’s Northwest Territories and Alberta. Fortune also owns the satellite Sue-Dianne copper-silver-gold deposit located 25 km north of the NICO Deposit and is a potential future source of incremental mill feed to extend the life of the NICO mill and concentrator.

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This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities legislation. This forward-looking information includes statements with respect to, among other things, additional drawdowns under the convertible security funding agreement, use of the second drawdown under the convertible security funding agreement, and the Company’s plans to develop the NICO Project. Forward-looking information is based on the opinions and estimates of management as well as certain assumptions at the date the information is given (including, in respect of the forward-looking information contained in this press release, assumptions regarding: final approval by the TSX in respect of the convertible security funding agreement and related matters; the Company’s ability to complete construction of a NICO Project refinery; the Company’s ability to arrange the necessary financing to continue operations and develop the NICO Project; the receipt of all necessary regulatory approvals for the construction and operation of the NICO Project, including the planned NICO cobalt-gold-bismuth-copper mine and concentrator and the timing thereof; growth in the demand for cobalt; the time required to construct the NICO Project; and the economic environment in which the Company will operate in the future, including the price of gold, cobalt and other by-product metals, anticipated costs and the volumes of metals to be produced at the NICO Project). However, such forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the risks that the TSX may not provide final approval in respect of the convertible security funding agreement and related matters, that global geopolitical situations may interfere with the Company’s ability to continue development of the NICO Project, the Company may not be able to finance and develop NICO on favourable terms or at all, uncertainties with respect to the receipt or timing of required permits, approvals and agreements for the development of the NICO Project, including the related hydrometallurgical refinery, the construction of the NICO Project may take longer than anticipated, the Company may not be able to secure offtake agreements for the metals to be produced at the NICO Project, the Sue-Dianne Property may not be developed to the point where it can provide mill feed to the NICO Project, the inherent risks involved in the exploration and development of mineral properties and in the mining industry in general, the market for products that use cobalt or bismuth may not grow to the extent anticipated, the future supply of cobalt and bismuth may not be as limited as anticipated, the risk of decreases in the market prices of cobalt, bismuth and other metals to be produced by the NICO Project, discrepancies between actual and estimated Mineral Resources or between actual and estimated metallurgical recoveries, uncertainties associated with estimating Mineral Resources and Reserves and the risk that even if such Mineral Resources prove accurate the risk that such Mineral Resources may not be converted into Mineral Reserves once economic conditions are applied, the Company’s production of cobalt, bismuth and other metals may be less than anticipated and other operational and development risks, market risks and regulatory risks. Readers are cautioned to not place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by the Company. The forward-looking information contained herein is made as of the date hereof and the Company assumes no responsibility to update or revise it to reflect new events or circumstances, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241223108910/en/

For further information please contact:

Fortune Minerals Limited

Troy Nazarewicz

Investor Relations Manager

info@fortuneminerals.com

Tel: (519) 858-8188

www.fortuneminerals.com

Source: Fortune Minerals Limited

FAQ

What is the value and terms of Fortune Minerals' (FTMDF) second convertible security with Lind?

The second convertible security has a face value of C$1,890,000 with a two-year term, drawn down for C$1,575,000. It includes conversion rights at 85% of the five-day VWAP and is secured by company assets.

How will Fortune Minerals (FTMDF) use the proceeds from the second convertible security?

The proceeds will be used for general working capital purposes and to pre-fund government-supported work on the NICO Cobalt-Gold-Bismuth-Copper Critical Minerals Project.

What warrants are included in FTMDF's second convertible security agreement?

The agreement includes 16,338,174 common share purchase warrants at an exercise price of C$0.0609 per share, valid for 60 months from issuance.

What are the conversion terms for FTMDF's second convertible security?

Lind can convert the face value over 24 months at 85% of the five-day volume weighted average price (VWAP) of Fortune's shares, subject to certain limits.