Excellon arranges $8M debenture placement

2020-07-03 07:49 ET – News Release

Mr. Brendan Cahill reports

EXCELLON ANNOUNCES $8 MILLION CONVERTIBLE DEBENTURE FINANCING

Excellon Resources Inc. has signed a binding term sheet for a fully subscribed financing of $8-million through the private placement of secured convertible debentures of the company. The proceeds will be used to repay the $6-million (U.S.) bridge loan with Sprott Private Resource Lending II (Collector) LP entered into in connection with the acquisition of Otis Gold Corp.

“We are pleased to realize the support of long-term and significant European shareholders to refinance our outstanding bridge loan at a 25-per-cent premium to yesterday’s closing share price,” stated Brendan Cahill, president and chief executive officer. “This financing comes as we begin the first drill campaign on our Silver City project in Saxony, Germany, which saw over 750 years of high-grade silver production until the 1870s, yet had never seen modern day exploration for precious metals until 2019.”

The debentures have a term of 36 months and are convertible into common shares of the company prior to maturity at a conversion price of $1.06 per common share. The debentures shall bear interest at an annual rate of 5.75 per cent, payable in cash semi-annually. Interest on the debentures may alternatively be paid in common shares of the company at the company’s option based on (i) the 10-day volume-weighted average price of the common shares prior to the payment date and (ii) an effective annual rate of 10 per cent. The debentures are secured against the company’s assets in Mexico.

On or after the second anniversary of the date of issue and prior to maturity, the company may accelerate the conversion of the entire issuance of debentures, provided that the 20-day VWAP of the common shares on or after such 24-month anniversary is equal to greater than $2.50, upon the company providing the lender with 30 calendar days of prior written notice of such accelerated conversion.

The purchasers of the debentures shall also be entitled to 2,248,000 common share purchase warrants or 281 warrants per $1,000 principal amount of debentures. Each warrant shall be exercisable at a price of $1.15 for a period of three years from the date of issuance.

In connection with the financing, the company has agreed to grant 377,358 common share purchase warrants with an exercise price of $1.15 and a term of 36 months. The common shares underlying the debentures, warrants and broker warrants shall be subject to a four-month hold period following closing of the financing in accordance with applicable securities legislation.

The financing is subject to approval by the Toronto Stock Exchange and final documentation and is expected to close on or about July 20, 2020.

About Excellon Resources Inc.

Excellon’s vision is to create wealth by realizing strategic opportunities through discipline and innovation for the benefit of employees, communities and shareholders.

We seek Safe Harbor.

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