American CuMo Mining Corporation (“CuMoCo” or the “Company”) (TSXV: MLY; OTCQX: MLYCF) is pleased to announce that its non-brokered private placement of up to 10,000,000 units (“CuMoCo Units”) at a price of Cdn$0.10 per unit for gross proceeds of up to $1,000,000 (the “CuMoCo Offering”), announced on May 12, 2016 has been closed and oversubscribed. The Board of Directors approved an increase to the size of the CuMoCo Offering, and the Company has sold a total of 10,241,500 CuMoCo Units for total gross proceeds of $1,024,150. A portion of the proceeds of the CuMoCo Offering will be applied to reduce the Company’s working capital deficit and the remainder for general corporate purposes.
Each CuMoCo Unit consists of one common share of the Company and one share purchase warrant (a “Warrant”) exercisable to purchase one common share of the Company at a price of Cdn $0.15 per common share until June 9, 2021 subject to an acceleration provision whereby the term of the Warrants may be accelerated in the event that the Company’s common shares trade at or above a price of Cdn $0.20 per share for a period of 10 consecutive trading days. In such case, the Company may, at its option, accelerate the expiry date by delivery of notice to the holder and issuing a press release announcing such acceleration, and, in such case, the expiry date of the Warrants shall be deemed to be the 20th day following the later of the date on which the acceleration notice is sent to the holder of the Warrants and the date of issuance of the press release. All securities issued pursuant to the CuMoCo Offering will be subject to a four month hold period, expiring on October 10, 2016.
Insiders and their associated parties, each being a “related party” of the Company (as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”)), have subscribed for a total 600,000 CuMoCo Units, as follows: Shaun Dykes (President, CEO and a director of the Company) and his associated parties, for 500,000 CuMoCo Units; and Trevor Burns (Vice-President, Corporate Communications, CFO and a director of the Company) for 100,000 CuMoCo Units. The Company has relied upon the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101 based on the fact that the fair market value of the related party participation in the CuMoCo Offering will not exceed 25% of the Company’s market capitalization prior to the closing of the CuMoCo Offering. The Board of Directors approved the participation of insiders in the CuMoCo Offering with the individual insiders who are directors abstaining from voting on their participation.
The Company also announces that it has granted options to purchase up to 2,400,000 common shares of the Company to directors and consultants at a price of $0.15 per share exercisable for a period of five years.
In other news, the Company has commenced its summer work on the CuMo Project, conducting various required surveys as part of the permitting process and is actively working with its new financing partners (see June 6, 2016 Press Release) to secure US$ 25 million as the first major step towards a definitive agreement.
CuMoCo is focused on advancing its CuMo Project towards feasibility and establishing itself as one of the largest and lowest-cost molybdenum producers in the world as well as a significant producer of copper and silver. Management is continuing to build an even stronger foundation from which to move the Company and the CuMo Project forward. For more information, please visit www.cumoco.com and www.cumoproject.com
For further information, please contact:
American CuMo Mining Corporation
Shaun Dykes, President and Chief Executive Officer
Tel: (604) 689-7902
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 new release.
This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation including, but not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, such as the Company’s ability to successfully negotiate the Definitive Agreement with the Chinese Partners, the Company’s ability to move the CuMo Project through development to feasibility and production, and for the Company to become one of the largest and lowest-cost molybdenum producers in the world as well as a significant producer of copper and silver. Forward-looking information is based on a number of material factors and assumptions, including the result of exploration activities, the ability of the Company to raise the financing for a feasibility study and to put the CuMo project into production, that no labour shortages or delays are experienced, that plant and equipment function as specified that the Court will not intervene with the Company’s proposed exploration activities at the CuMo Project, and the ability of the Company to obtain all requisite permits and licenses to advance the CuMo Project and eventually bring it into production. Forward-looking information involves known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future prediction, projection or forecast expressed or implied by the forward-looking information. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of molybdenum, silver and copper; possible variations in grade or recovery rates; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing, as well as those factors disclosed in the Company’s publicly filed documents, including the Company’s Management’s Discussion and Analysis for the period ended March 31, 2016. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.