TSX Venture Exchange: FEO
VANCOUVER, Nov. 29, 2018 /CNW/ - Oceanic Iron Ore Corp.
(TSX-V: FEO) ("Oceanic", or the "Issuer") is
pleased to announce the completion of a non-brokered financing in
an aggregate amount of $1,812,500
(the "Financing").
The subscribers to the Financing will be issued Series B
convertible debentures (the "Debentures") which will earn
interest at a rate of 8.5% per annum over a 60 month term (the
"Term"), payable quarterly.
The principal amount of the Debentures will be convertible to
units ("Unit") during the Term at the election of the
subscriber. The conversion price during the first year of the
term is $0.05 per Unit, increasing to
$0.10 per Unit for the remainder of
the Term. Each Unit will consist of one common share of the
Issuer and one share purchase warrant of the Issuer, with each
whole warrant entitling the holder to purchase one common share of
the Issuer at a price of $0.05 per
common share, expiring November 29,
2023.
The Debentures will be secured with a first ranking charge
against the assets of the Issuer, ranking pari-passu with the
current secured debenture holders.
The Debentures and any Units acquired on conversion thereof are
subject to a hold period expiring on March
30, 2019. No finder's fees were paid in connection
with the Financing.
The Issuer intends to use the proceeds of the Financing to fund
a revised and re-scoped National Instrument 43-101 Preliminary
Economic Assessment in respect of the Issuer's Hopes Advance
Project (the "Study"), as previously announced on November 1, 2018. The Study will revise the
profile and production schedule of Hopes Advance in order to reduce
the up-front capital required to bring the project to commercial
production. The proceeds from the Financing will also be used to
fund ongoing negotiations with potential strategic partners,
general claims maintenance, and corporate and working capital
purposes.
Insiders of the Issuer were issued Debentures with a principal
amount in aggregate of $725,000, and,
accordingly, the private placement is a "related party transaction"
within the meaning of Multilateral Instrument 61-101 Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). The issuance of Debentures to insiders is exempt
from the valuation requirements and the minority approval
requirements of MI 61-101 by virtue of the exemptions in sections
5.5(a) and 5.7(a) of MI 61-101, since the fair market value of the
consideration for the Debentures issued to insiders did not exceed
25% of the Issuer's market capitalization.
Early Warning Disclosure – Frank
Giustra
Pursuant to the Financing, Canada Life Ltd., an investment
account controlled and directed by Mr. Frank Giustra, acquired a Debenture of the
Issuer in the principal amount of $500,000 which is convertible into 10,000,000
common shares and 10,000,000 warrants if converted in the first
year. In addition to the Debenture, Mr. Giustra, directly and
indirectly, now owns and/or controls, in aggregate, 7,714,850
common shares, representing 11.24% of the current issued and
outstanding common shares of the Issuer and a $200,000 Series A convertible debenture of the
Issuer convertible into 2,000,000 common shares and 2,000,000
warrants. Assuming conversion of both the Series A
convertible debenture and the Debenture and the exercise of the
underlying warrants, Mr. Giustra would own and/or control, directly
and indirectly, 31,714,850 common shares, representing 34.24% of
the issued and outstanding common shares of the Issuer on a
partially diluted basis.
The Issuer has been advised that Mr. Giustra acquired the
Debenture for investment purposes and may in the future acquire or
dispose of securities of the Issuer, through the market, privately
or otherwise, as circumstances or market conditions warrant.
Early Warning Disclosure – Steven
Dean
Pursuant to the Financing, Sirocco Advisory Services Ltd., a
corporation owned and controlled by Steven
Dean, acquired a Debenture in the principal amount of
$115,000. The Debenture is
convertible into 2,300,000 units of the Issuer of a price of
$0.05 per unit until November 29, 2019 and thereafter into 1,150,000
units of the Issuer at a price of $0.10 per unit until November 29, 2023. Each unit will consist of one
common share of the Issuer and one warrant, each warrant entitling
the holder to purchase one common share of the Issuer at a price of
$0.05 per share from the date of
issuance until November 29, 2023.
Prior to acquiring the Debenture, the Mr. Dean held, directly
and indirectly, or had control or direction over, over an aggregate
of 1,239,804 common shares of the Issuer representing approximately
1.81% of the issued and outstanding common shares of the Issuer,
1,641,700 stock options of the Issuer, a Series A Debenture in the
principal amount of $33,000
convertible into 330,000 units of the Issuer, each unit consisting
of one common share and one warrant of the Issuer, and restricted
share units convertible into 333,333 common shares of the
Issuer.
Mr. Dean would have held, directly and indirectly, or had
control or direction over, an aggregate of 3,874,837 common shares
of the Issuer, representing approximately 5.44% of the issued and
outstanding shares on a partially diluted basis assuming the
exercise of the stock options, conversion of the Series A Debenture
and exercise of the underlying warrants, and conversion of the
restricted share units.
Following acquisition of the Debenture, Mr. Dean holds, directly
and indirectly, or has control or direction over, an aggregate of
1,239,804 common shares of the Issuer, representing approximately
1.81% of the issued and outstanding common shares of the Issuer,
1,641,700 stock options of the Issuer, a Series A Debenture in the
principal amount of $33,000
convertible into 330,000 units of the Issuer, each unit consisting
of one common share and one warrant of the Issuer, restricted share
units convertible into 333,333 common shares of the Issuer, and the
Debenture convertible into 2,300,000 units of the Issuer of a price
of $0.05 per unit until November 29, 2019 and thereafter into 1,150,000
units of the Issuer at a price of $0.10 per unit until November 29, 2023, each unit consisting of one
common share of the Issuer and one warrant, each warrant entitling
the holder to purchase one common share of the Issuer at a price of
$0.05 per share from the date of
issuance until November 29, 2023.
Mr. Dean would hold 8,474,837 common shares of the Issuer,
representing approximately 11.17% of the issued and outstanding
common shares on a partially diluted basis assuming the exercise of
the stock options, conversion of the Series A Debenture and
exercise of the underlying warrants, conversion of the restricted
share units and conversion of the Debenture at a price of
$0.05 per unit and exercise of the
underlying warrants.
The Issuer has been advised that Mr. Dean acquired the
securities for investment purposes and may in the future acquire or
dispose of additional securities of the Issuer through the market,
privately, or otherwise, as circumstances or market conditions
warrant.
Copies of the Early Warning Reports filed by Mr. Giustra and Mr.
Dean may be obtained from the Issuer's CFO, Chris Batalha (604-566-9080).
OCEANIC IRON ORE CORP. (www.oceanicironore.com)
On behalf of the Board of Directors
"Steven Dean"
Chairman
+604 566-9080
This news release includes certain "Forward-Looking
Statements" as that term is used in applicable securities law. All
statements included herein, other than statements of historical
fact, including, without limitation, statements regarding potential
mineralization and resources, exploration results, and future plans
and objectives of Oceanic Iron Ore Corp. ("Oceanic", or the
"Issuer"), are forward-looking statements that involve various
risks and uncertainties. In certain cases, forward-looking
statements can be identified by the use of words such as "plans",
"expects" or "does not expect", "scheduled", "believes", or
variations of such words and phrases or statements that certain
actions, events or results "potentially", "may", "could", "would",
"might" or "will" be taken, occur or be achieved. There can be no
assurance that such statements will prove to be accurate, and
actual results could differ materially from those expressed or
implied by such statements. Forward-looking statements are
based on certain assumptions that management believes are
reasonable at the time they are made. In making the
forward-looking statements in this presentation, the Issuer has
applied several material assumptions, including, but not limited
to, the assumption that: (1) there being no significant disruptions
affecting operations, whether due to labour/supply disruptions,
damage to equipment or otherwise; (2) permitting, development,
expansion and power supply proceeding on a basis consistent with
the Issuer's current expectations; (3) certain price assumptions
for iron ore; (4) prices for availability of natural gas, fuel oil,
electricity, parts and equipment and other key supplies remaining
consistent with current levels; (5) the accuracy of current mineral
resource estimates on the Issuer's property; and (6) labour and
material costs increasing on a basis consistent with the Issuer's
current expectations. Important factors that could cause actual
results to differ materially from the Issuer's expectations are
disclosed under the heading "Risks and Uncertainties " in the
Issuer's MD&A filed November 22,
2018 (a copy of which is publicly available on SEDAR at
www.sedar.com under the Issuer's profile) and elsewhere in
documents filed from time to time, including MD&A, with the TSX
Venture Exchange and other regulatory authorities. Such factors
include, among others, risks related to the ability of
the Issuer to obtain necessary financing and adequate insurance;
the economy generally; fluctuations in the currency markets;
fluctuations in the spot and forward price of iron ore or certain
other commodities (e.g., diesel fuel and electricity); changes in
interest rates; disruption to the credit markets and delays in
obtaining financing; the possibility of cost overruns or
unanticipated expenses; employee relations. Accordingly, readers
are advised not to place undue reliance on Forward-Looking
Statements. Except as required under applicable securities
legislation, the Issuer undertakes no obligation to publicly update
or revise Forward-Looking Statements, whether as a result of new
information, future events or otherwise.
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 Oceanic Iron Ore Corp.
