TORONTO, Dec. 20, 2016 /CNW/ - Melior Resources Inc.
("Melior" or the "Company") (TSXV:MLR) is pleased to announce that
it has closed its previously announced non-brokered private
placement (the "Private Placement"). An aggregate of
60,000,000 common shares ("Common Shares") of the Company were
issued at C$0.03 per Common Share for
gross proceeds of C$1.8
million. The Private Placement was originally announced
on December 14, 2016.
Mark McCauley, the Chief
Executive Officer of the Company commented "This capital raising
provides Melior with a strong platform from which it can move
forward during the first quarter of 2017. The focus over the next
six months will be to find an appropriate strategic partner for the
Goondicum mine and to continue to assess the prospective potential
of Melior's unique Browne Metallurgical Process which looks to
upgrade ilmenite to a higher TiO2 concentration."
The subscriptions by Pala Investments Limited ("Pala") and
Takota Asset Management Inc. ("Takota") constitute "related party
transactions" within the meaning of Multilateral Instrument 61-101
– Protections of Minority Security Holders in Special
Transactions ("MI 61-101"). The Board of Directors of
Melior (the "Board"), acting in good faith, and the independent
members of the Board, acting in good faith, determined that the
Company is in serious financial difficulty, that the Private
Placement is designed to improve the Company's financial position
and that the terms of the Private Placement and Pala and Takota's
subscription for Common Shares thereunder are reasonable in the
Company's circumstances. As such, Melior has relied on the
exemption from the formal valuation and minority shareholder
approval requirements of MI 61-101 contained in Section 5.5(g) and
Section 5.7(1)(e) of MI 61-101 on the basis of financial hardship.
Pursuant to the Private Placement, Pala, Belmont Park Investments
Pty Ltd., Panorama Ridge Pty Ltd. and Takota received
36,666,667, 8,333,333, 8,333,333 and 6,666,667
Common Shares respectively and now hold 131,194,865,
26,877,149, 26,877,149 and 35,426,134 Common Shares
respectively (representing approximately 48%, 9.9%, 9.9% and
13% of the issued and outstanding Common Shares respectively).
The TSX Venture Exchange ("TSXV") has granted listing approval
of the Common Shares issued under the Private Placement subject to
final acceptance. Such Common Shares are subject to resale
restrictions pursuant to applicable Canadian securities laws and
requirements, as well as stock exchange rules, until April 21, 2017.
Forward Looking Statements Disclaimer
Statements made in this news release may be forward-looking
and therefore subject to various risks and uncertainties. Such
statements can typically be identified by terminology such as
''may'', ''will'', ''could'', ''should'', ''expect'', ''plan'',
''anticipate'', ''believe'', ''intend'', ''possible'',
''continue'', "objective" or other similar expressions concerning
matters that are not historical facts. Certain material factors or
assumptions are applied in making forward-looking statements and
actual results may differ materially from those expressed or
implied in such statements. Melior does not undertake to update any
forward-looking statements; such statements speak only as at the
date made.
Going Concern Risk
As described in Melior's MD&A, the continuing operations
of the Company are dependent upon its ability to continue to raise
adequate financing, to commence profitable operations in the
future, and repay its liabilities arising from normal business
operations as they become due. There remains a significant risk
that the Company is unable to find alternative sources of financing
for on-going working capital requirements. These material
uncertainties cast significant doubt upon the Company's ability to
continue as a going concern.
Failure to obtain sufficient financing, could result in a
delay or abandonment of the Goondicum Mine and could force the
Company into reorganization, bankruptcy or insolvency proceedings.
Additional financing may not be available when needed or, if
available, the terms of such financing might not be favourable to
the Company and might involve substantial dilution to existing
shareholders. Failure to raise capital when needed would have a
material adverse effect on the Company's ability to pursue its
business strategy, and accordingly could negatively impact the
Company's business, financial condition and results of
operations.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Melior Resources Inc.
