NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES
Shares Outstanding: 20,999,693
TORONTO, Dec. 08, 2017 (GLOBE NEWSWIRE) — Pele Mountain Resources Inc. (TSXV:GEM) (“Pele” or the “Corporation”) announces that further to its press release dated November 24, 2017, it has entered into agreements with certain creditors (“Creditors”), including Creditors who are related parties of the Corporation, providing for the settlement of approximately $1,213,457 of its outstanding debts (the “Debt Settlement”). Pursuant to the Debt Settlement, approximately $964,047 in debt will be settled through the issuance of an aggregate of 12,630,902 common shares of the Corporation (“Common Shares”) at a price of $0.068 per Common Share, $87,000 in debt will be settled through the issuance of 966,667 Common Shares at a price of $0.09 per Common Share, $68,189 will be paid in cash, and $94,221 owed to related party creditors will be forgiven. The Debt Settlement is subject to the approval of the TSX Venture Exchange (“TSXV”). The Corporation expects to close the Debt Settlement immediately after such approval is obtained. Common Shares issued pursuant to the Debt Settlement will be subject to a statutory hold period of four months and one day from the closing date.
Pele further announces that Martin Cooper, the Interim CEO and President, Vice President, Indigenous Relations and a director of the Corporation, has waived a total of $114,750 in salary accrued between January, 2016 to May, 2017. This waiver of salary, together with the Debt Settlement, will reduce Pele’s indebtedness to less than $123,000 (net of disputed/aged payables of approximately $98,000) and increase the number of issued and outstanding Common Shares to 34,597,262.
Martin Cooper, Pele’s newly appointed Interim CEO and President, emphasized how important this restructuring of Pele’s debt is for its future prospects as management focuses on seeking out strategic alternatives for Pele to enhance shareholder value. Mr. Cooper thanked all creditors of Pele who participated in this debt settlement and forgiveness initiative which is critical for Pele’s future economic viability and prospects.
Certain Creditors who are insiders of the Corporation or related to such insiders (collectively, the “Related Creditors”) will participate in the Debt Settlement. John Wilkinson, a director of the Corporation, will settle $6,332 in outstanding director’s fees in exchange for 93,125 Common Shares, and will forgive a further $9,720 in fees; Wilkinson Insight Incorporated, a corporation beneficially owned by Mr. Wilkinson, will settle $26,059 in debt in exchange for 383,227 Common Shares, and will forgive a further $39,089 in debt; Peter Dimmell, a director of the Corporation, will settle $7,100 in outstanding director’s fees in exchange for 104,412 Common Shares, and will forgive a further $10,650 in fees; Richard Cooper, a director of the Corporation, will settle $6,240 in outstanding director’s fees in exchange for 91,765 Common Shares, and will forgive a further $9,360 in fees; Richco Waterfall Equities Ltd., a corporation beneficially owned by Mr. Cooper, will settle $16,934 in debt in exchange for 249,036 Common Shares, and will forgive a further $25,402 in debt; and Forbes Andersen LLP, a partnership of which Paul Andersen, the Chief Financial Officer of the Corporation is the Managing Partner, will settle $201,380 in outstanding debt in exchange for 2,961,469 Common Shares.
The participation in the Debt Settlement by the Related Creditors constitutes a “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) under applicable securities laws. The Corporation is relying on exemptions from the MI 61-101 formal valuation and minority approval requirements applicable to related party transactions available as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Debt Settlement, insofar as it involves the Related Creditors, exceeds 25% of the Corporation’s market capitalization at the time at which such transactions were agreed to. The participation by each Related Creditor in the Debt Settlement was approved by directors of the Corporation who are independent of the Related Creditors.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to or for the account or benefit of a U.S. person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About Pele Mountain Resources Inc.
Pele shares are listed on the TSXV under the symbol “GEM”. The halt on trading of Pele shares imposed by the TSXV on or about June 2, 2017 was lifted by the TSXV at opening of trading on December 7, 2017.
For further information please contact Martin Cooper, Interim Chief Executive Officer and President, at 1-800-315-7353.
This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, such as statements that describe the Corporation’s plans, objectives or goals, including words to the effect that the Corporation or management expects a stated condition or result to occur, are forward-looking information. In particular, this news release contains forward-looking information in relation to implementation, closing, terms, and expected results of the Debt Settlement, and Pele’s business objectives. This forward-looking information reflects the expectations and beliefs of management based on information currently available, and on assumptions that the Corporation believes are reasonable, including, without limitation, assumptions regarding regulatory approval of the Debt Settlement on the terms agreed by the Corporation and the Creditors, and completion of the Debt Settlement. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Such risks and other factors may include, without limitation, delay or failure to receive regulatory approvals; capital market conditions and market prices for securities; general business, economic, competitive, political and social conditions; competition; changes in legislation, including environmental legislation, affecting the Corporation; the timing and availability of financing on acceptable terms, as well as the other risk factors described in the Corporation’s disclosure documents filed on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on forward-looking information. The forward-looking information contained in this news release is expressly qualified by this cautionary statement. The Corporation undertakes no duty to update any such forward-looking information, except as required by law. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.