/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS./
TORONTO, July 7, 2017 /CNW/ - MillenMin Ventures Inc.
(TSX-V: MVM) announces an update to its proposed private placement
offering of common shares and subscription receipts with Bellomonte
Investments Company Limited and other investors as part of a
proposed reverse takeover, which also involves an acquisition of
Bellomonte Limited, which controls a 49% interest in Bellomonte
S.A., a Cuban joint stock company that plans to construct, develop
and operate a golf resort in Cuba. This proposed private
placement offering and related transactions were previously
announced by MillenMin in its news release issued on January 27, 2017 and further disclosed in detail
in its filing statement dated April
12, 2017. A copy of such news release and filing
statement is available on SEDAR at www.sedar.com. Unless
otherwise defined herein, capitalized terms used herein shall have
the meanings assigned to such terms in MillenMin's news release
dated January 27, 2017.
Since announcing the Control Placement, MillenMin has been
informed that one of the Four Investors would not be able to
complete in a timely manner. As such, MillenMin intends to
proceed with the Control Placement with BICL and the remaining
three investors (the "Other Investors"). The Control
Placement will be reduced by 4,483,000 Common Shares and by
74,627,000 Subscription Receipts and the allocation between Common
Shares and Subscription Receipts to be subscribed for by each of
BICL and the Other Investors will be adjusted, such that an
aggregate of 26,000,000 Common Shares and 241,919,000 Subscription
Receipts are expected to be issued under the Control Placement for
gross proceeds of US$1,972,000 and
US$18,347,997, respectively.
The investor who will no longer be participating in the Control
Placement, or another replacement investor, may ultimately
determine to invest in MillenMin securities at a later time prior
to the completion of the Vend-in Transaction, although there is no
assurance that any such subsequent investment will be made.
MillenMin and the Other Investors have amended the Letter
Agreement to set out this revised Control Placement and, to comply
with regulatory requirements with respect to working capital, BICL
has agreed to extend the term of its $125,000 loan to MillenMin and to provide a new
$1,500,000 loan facility to MillenMin
for purposes of designing the golf resort in furtherance of the
Vend-in Transaction. Each of the foregoing loans shall be for
a term ending upon the earlier of: (a) the date of the completion
of the Vend-in Transaction; or (b) the date that is 18 months after
the date of the completion of the Control Placement.
Revised Control Placement
The Control Placement now consists of: (1) a private placement
of 26,000,000 Common Shares at a price of $0.10 per Common Share, which is expected to be
paid in US dollars, for gross proceeds of US$1,972,000, and (2) a private placement of
241,919,000 Subscription Receipts at a price of $0.10 per Subscription Receipt, which is also
expected to be paid in US dollars, for gross proceeds of
US$18,347,997. Each
Subscription Receipt will continue to be automatically exchanged
for one Common Share on satisfaction of the Escrow Release
Conditions. All of the subscription proceeds from the private
placement of Subscription Receipts will be held in escrow until the
Escrow Release Conditions are satisfied. If the Escrow
Release Conditions are not satisfied by 5:00
pm (Toronto time) on
December 31, 2017, the subscription
proceeds will be used to repurchase the Subscription Receipts for
cancellation at a repurchase price per Subscription Receipt that is
equal to the purchase price. As previously disclosed, the
prices for the Common Shares and the Subscription Receipts are
expected to be paid in US dollars based on an agreed exchange rate
of one Canadian dollar for
US$0.758437618.
Immediately on completion of the Control Placement, BICL and the
Other Investors will together hold approximately 61.8% of the
issued and outstanding Common Shares, with BICL holding
approximately 49.2% of the issued and outstanding Common Shares and
the Other Investors holding 2.8%, 3.9% and 5.9% of the issued and
outstanding Common Shares. Two of the Other Investors are
related and, together, they will control approximately 9.8% of the
issued and outstanding Common Shares.
With 49.2% of the issued and outstanding Common Shares, BPHL,
through its wholly-owned subsidiary, BICL, will be a Control
Person. MillenMin expects to obtain shareholder approval for
the new Control Person by the written consent of shareholders
holding more than 50% of the issued shares. MillenMin is not
required and does not intend to file an amended filing
statement. Currently, none of BICL and the Other Investors
beneficially owns any Common Shares.
Pursuant to the amended Letter Agreement, MillenMin and BICL
have amended the loan agreement dated January 27, 2017 to extend the repayment date
such that the $125,000 loaned by BICL
to MillenMin is to be repaid on the earlier of (a) the date of the
closing of the Vend-in Transaction or (b) the date that is 18
months after the date of the closing of the Control
Placement. In addition, BICL will make available to MillenMin
a loan facility of up to $1,500,000
on a non-interest bearing basis for the purpose of designing the
golf resort in connection with the Vend-in Transaction, to be
repaid on the earlier of (a) the date of the closing of the Vend-in
Transaction or (b) the date that is 18 months after the date of the
closing of the Control Placement.
On satisfaction of the Escrow Release Conditions (which include
the completion of the Vend-in Transaction) and not including the
subsequent investments by other investors or the proposed brokered
private placement prior to the completion of the Vend-in
Transaction, the Subscription Receipts will be exchanged for Common
Shares such that BICL and the Other Investors will hold, in
aggregate, approximately 97.5% of the issued and outstanding Common
Shares, with BICL holding approximately 72.8% of the issued and
outstanding Common Shares and the Other Investors holding 4.1%,
8.2% and 12.4% of the issued and outstanding Common Shares.
Two of the Other Investors are related and, together, they will
control approximately 20.6% of the issued and outstanding Common
Shares, but are expected to, in fact, control less than 20% on
completion of the subsequent investments by other investors and the
proposed brokered private placement prior to the completion of the
Vend-in Transaction and on satisfaction of the conditions for TSX
Venture Exchange acceptance, without which shareholder approval
would be required for any news Control Persons.
Interests of Insiders
The shareholdings of each current insider, promoter and control
person of the Issuer, before and after the Control Placement, are
set out below:
|
Insider, Promoter
or Control Person of Issuer
|
|
Common Shares
Owned
Before the
Control Placement
|
|
Common Shares
Owned
After the Control Placement
|
|
Number
|
|
Percentage
|
|
Number
|
|
Percentage
|
|
|
|
|
|
|
|
|
|
|
MillenAsia Resource
Inc.(1)
Control Person
|
|
4,000,000
|
|
24.9%
|
|
4,000,000
|
|
9.5%
|
|
|
|
|
|
|
|
|
|
|
Shunyi
Yao(1)
Chairman of the Board, Chief Executive Officer and
Director
|
|
1,200,000
|
|
7.5%
|
|
1,200,000
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
Yunkai Cai
President, Interim Chief Financial Officer and Director
|
|
1,205,000
|
|
7.5%
|
|
1,205,000
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
Peiwei Ni
Director
|
|
400,000
|
|
2.5%
|
|
400,000
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
Fan Xu
Corporate Secretary
|
|
346,000
|
|
2.1%
|
|
346,000
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
John Paterson
Director
|
|
300,000
|
|
1.9%
|
|
300,000
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
7,451,000
|
|
46.3%
|
|
7,451,000
|
|
17.7%
|
|
_______________
|
|
Note:
|
|
(1)
|
MillenAsia Resource
Inc. is wholly-owned by Li Liu, who is the spouse of Shunyi
Yao. MillenAsia Resource Inc. previously held warrants to
purchase up to 1,500,000 Common Shares at an exercise price of
$0.40 per Common Share, such warrants expired on May 24,
2017.
|
Under the amended Letter Agreement, the completion of the
Control Placement is conditional on all loans or indebtedness
outstanding that have been made or incurred to any director,
officer or shareholder, to any former director, officer or
shareholder of MillenMin or to any Person not dealing at arm's
length (as such term is construed under the Tax Act) with any of
the foregoing will have been paid and satisfied, unless
waived. All indebtedness and other obligations shown as owing
by MillenMin to related parties in MillenMin's financial statements
will have been paid and satisfied such that no amounts are owing to
any director, officer or shareholder of MillenMin as at completion
of the Control Placement, unless waived. As of February 28, 2017, the amount of all loans and
indebtedness outstanding that have been made or incurred to any
director, officer or shareholder, to any former director, officer
or shareholder of the Issuer or to any Person not dealing at arm's
length is approximately $103,150.
Pro Forma Consolidated Capitalization
The following table sets forth the pro forma share and loan
capital of MillenMin, after giving effect to the Control
Placement.
|
Designation of
Security(1)
|
|
Amount Authorized
or
to be Authorized
|
|
Amount Outstanding
After
Giving Effect to the Control
Placement
|
|
|
|
|
|
|
Common
Shares
|
|
An unlimited number
of Common Shares
|
|
42,100,000 Common
Shares ($3,745,690)(2)
|
|
|
|
|
|
|
Subscription
Receipts(3)
|
|
Up to 309,399,162
Subscription Receipts
|
|
241,919,000
Subscription Receipts ($24,191,900)(2)
|
|
_____________
|
|
Notes:
|
|
(1)
|
MillenMin had
outstanding warrants held by a related party, MillenAsia Resource
Inc., to purchase up to 1,500,000 Common Shares at an exercise
price of $0.40 per Common Share that expired on May 24,
2017.
|
|
(2)
|
Under the Control
Placement, the prices for the Common Shares and the Subscription
Receipts are expected to be paid in US dollars based on an agreed
exchange rate of one Canadian dollar for US$0.758437618. The
26,000,000 Common Shares to be issued at a price of $0.10 per
share, is expected to be paid in US dollars, for gross proceeds of
US$1,972,000, and the 241,919,000 Subscription Receipts at a price
of $0.10 per subscription receipt, is also expected to be paid in
US dollars, for gross proceeds of US$18,347,997.
|
|
(3)
|
Each Subscription
Receipt will be exchanged for one Common Share on satisfaction of
the Escrow Release Conditions. All of the subscription
proceeds from the private placement of Subscription Receipts will
be held in escrow until the Escrow Release Conditions are
satisfied. If the Escrow Release Conditions are not satisfied
by 5:00 pm (Toronto time) on December 31, 2017, the subscription
proceeds will be used to repurchase the Subscription Receipts for
cancellation at a repurchase price per Subscription Receipt that is
equal to the purchase price.
|
Fully-Diluted Share Capital
The following table sets forth the fully-diluted share capital
of MillenMin after giving effect to the Control Placement:
|
|
Outstanding After
Giving Effect
to the Control Placement
|
|
Designation of
Security
|
|
Amount
|
|
Percentage
|
|
Common Shares
Issued(1)
|
|
42,100,000
|
|
14.8%
|
|
Common Shares
reserved for issuance on exchange of Subscription
Receipts
|
|
241,919,000
|
|
85.2%
|
|
Total Number of
Common Shares (fully-diluted)
|
|
284,019,000
|
|
100.0%
|
|
_______________
|
|
Note:
|
|
(1)
|
Based on 26,000,000
Common Shares issued under the Control Placement and the 16,100,000
Common Shares currently issued.
|
Available Funds and Principal Purposes
On completion of the Control Placement, MillenMin is expected to
have funds available of approximately $2,527,362 based on a working capital deficiency
as at May 31, 2017 of approximately
$197,720 and gross proceeds from the
private placement of Common Shares as part of the Control Placement
of $2,600,000. The available
funds do not include the gross proceeds of US$18,347,997 from the private placement of
Subscription Receipts (to be held in escrow until satisfaction of
the Escrow Release Conditions).
On completion of the Control Placement, MillenMin will use the
funds available to further its business objectives.
Specifically, MillenMin will use the funds available to it on the
completion of the Control Placement over the next 12 months as
follows:
|
Use of
Proceeds
|
|
Amount
|
|
Advisory fees and
expenses for the Vend-in Transaction (including financial, legal
and audit fees)
|
|
$600,000
|
|
Operating and
administrative expenses of the Issuer's Canadian
office(1)
|
|
$1,200,000
|
|
Establishment of
Cuban representative office including related
expenses(2)
|
|
$600,000
|
|
Total:(3)(4)
|
|
$2,400,000
|
|
___________
|
|
Notes:
|
|
(1)
|
The operating and
administrative expenses of the Canadian office are based on a cost
of $100,000 per month.
|
|
(2)
|
The costs relating to
the establishment of the Cuban representative office includes
general expenses, as well as the expected travel and living costs
for personnel in Cuba for twelve months.
|
|
(3)
|
Repayment of the
$125,000 loan from BICL to MillenMin has been or will be extended
to the earlier of (a) the date of the closing of the Vend-in
Transaction or (b) the date that is 18 months after the date of the
closing of the Control Placement.
|
|
(4)
|
BICL has made or will
make available to MillenMin a loan facility of up to $1,500,000 on
a non-interest bearing basis for payment of professional fees
relating to the golf resort schematic design, repayment to be on
the earlier of (a) the date of the closing of the Vend-in
Transaction or (b) the date that is 18 months after the date of the
closing of the Control Placement.
|
There may be circumstances after the completion of the Control
Placement that, for business reasons, a reallocation of funds may
be necessary in order for MillenMin to achieve its business
objectives.
Selected Pro Forma Financial Information
The following table sets out certain financial information for
the Issuer as at February 28, 2017,
as well as unaudited pro forma financial information for MillenMin,
after giving effect to the Control Placement.
|
MillenMin(1)
|
|
Adjustments
|
|
Pro
Forma(2)
|
|
Cash
|
$116,854
|
|
$2,462,000
|
|
$2,578,854
|
|
Total
Assets
|
$134,345
|
|
$2,462,000
|
|
$2,596,345
|
|
Total
Liabilities
|
$285,229
|
|
-
|
|
$285,229
|
|
Shareholders'
Equity
|
$(150,884)
|
|
|
|
$2,311,116
|
|
_____________
|
|
Notes:
|
|
(1)
|
Financial position of
MillenMin is as of February 28, 2017.
|
|
(2)
|
Assumes net proceeds
of $2,462,000 from the Control Placement after deduction of Control
Placement expenses and other pro-forma adjustments.
|
Update on Risk Factors
Risk factors relating to the Control Placement, relating to
MillenMin before completion of the Vend-in Transaction, and
relating to MillenMin after completion of the Vend-in Transaction,
include, but are not limited to the risk factors set out in the
filing statement dated as of April 12,
2017, a copy of which is available on SEDAR at
www.sedar.com. In addition, there is a risk associated with
the recently announced new United
States government policy towards Cuba.
Risks associated with the new developments in the US
government policy towards Cuba.
On June 16, 2017, the United States government announced changes
to its policy towards Cuba that
will reverse some of the changes previously made to loosen
restrictions on American trade and travel with Cuba. The new
American policy is expected to re-instate some restrictions,
including prohibitions on transactions involving Cuba's military, intelligence and security
services, and limit travel by Americans to Cuba. The policy
changes are expected to be implemented by the United States
Department of the Treasury's Office of Foreign Assets Control
("OFAC") under its Cuban Assets Control Regulations.
These changes will not be effective until the regulations have been
issued, which may take up to several months or longer.
The new American restrictions are expected to or will generally
prohibit any transactions by persons subject to United States government jurisdiction
involving certain entities that are controlled by, or act for, or
on behalf of, the Cuban military. The United States
Department of State will publish a list of Cuban military
intelligence and security services entities. OFAC will then
prohibit direct financial transactions by persons subject to
United States government
jurisdiction with entities on this list.
The new United States
government policy towards Cuba
also calls for a partial reversal of restrictions on travel to
Cuba by persons subject to
United States government
jurisdiction, specifically for individual people-to-people
travel. Individual people-to-people travel will no longer be
authorized. Group travel for people-to-people exchanges and
educational activities will remain permitted, but the group must
maintain a full-time schedule of educational exchange activities
and travelers must be accompanied by a representative of the
organization that sponsors such exchanges. All travelers must
keep accurate records to establish that their travel was for
purposes permitted by the regulations. The people-to-people
provision has been frequently used by Untied States travelers to
visit Cuba. Going forward, in the absence of the individual
people-to-people provision, there can be no assurance that the
growth of visitor traffic from the United
States to Cuba will
continue in sufficient numbers.
If MillenMin, after the Vend-in Transaction, fails to address
these incoming United States
regulations and any subsequent changes, its business and results of
operations may be negatively impacted. The new policy
announcement and subsequent related regulations could also make it
more difficult to attract and retain business partners, suppliers
and contractors and may have an adverse effect on MillenMin's
business, financial condition, and results of operations. The
enhanced requirements, including detailed record keeping
requirements, could decrease the flow of American tourists and have
a material adverse effect on MillenMin's business, financial
condition, and results of operations, after the Vend-in Transaction
is completed. It is expected that MillenMin, after the
Vend-in Transaction, will take reasonable precautions to protect
its business, financial condition and operations from the impact of
this new American policy towards Cuba. However, there can be
no assurance that its efforts in this regard will be
sufficient.
Trading Halt
Trading of the MillenMin shares has been halted on the TSX
Venture Exchange and it is expected that the trading halt will
continue until submissions to the TSX Venture Exchange for the
Vend-in Transaction have been completed to the satisfaction of the
TSX Venture Exchange or until it determines otherwise in its
discretion.
Additional Information
Additional information about MillenMin is available to the
public on SEDAR at www.sedar.com.
The information with respect to Bellomonte, BL, BICL and the
BE Group in this news release has been provided by BICL.
MillenMin does not represent that this information is accurate or
complete.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, contractual conditions,
Exchange acceptance and applicable disinterested shareholder
approvals. The Transaction cannot close until the required
shareholder approvals and applicable regulatory approvals are
obtained and contractual conditions are met or waived. There
can be no assurance that the Transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the transaction, any information released or
received with respect to the transaction may not be accurate or
complete and should not be relied upon. Trading in the
securities of MillenMin Ventures Inc. should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this news release.
Neither 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.
Forward-Looking Statements
This news release contains forward-looking statements and
information that are based on the beliefs of management and reflect
MillenMin's current expectations. When used in this news
release, the words "estimate", "project", "belief", "anticipate",
"intend", "expect", "plan", "predict", "may" or "should" and the
negative of these words or such variations thereon or comparable
terminology are intended to identify forward-looking statements and
information. The forward-looking statements and information
in this news release includes information relating to completion of
the Control Placement, the Vend-in Transaction and the
Transaction. The forward-looking information is based on
certain assumptions, which could change materially in the
future. Such statements and information reflect the current
view of MillenMin with respect to risks and uncertainties that may
cause actual results to differ materially from those contemplated
in those forward-looking statements and information. By their
nature, forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause MillenMin's actual
results, performance or achievements, or other future events, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the risk that
MillenMin is unable to complete the Control Placement, the Vend-in
Transaction and the Transaction, as expected or at all, the risk
that the necessary directors, shareholders and regulatory approvals
are not obtained or the Transaction may be terminated prior to
completion, the risks associated with property development and
doing business in Cuba. When relying on MillenMin's
forward-looking statements and information to make decisions,
investors and others should carefully consider the foregoing
factors and other uncertainties and potential events.
MillenMin has assumed a certain progression, which may not be
realized. It has also assumed that the material factors
referred to above will not cause such forward-looking statements
and information to differ materially from actual results or
events. However, the list of these factors is not exhaustive
and is subject to change and there can be no assurance that such
assumptions will reflect the actual outcome of such items or
factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF MILLENMIN AS OF THE DATE OF THIS
NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH
DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON
FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS
INFORMATION AS OF ANY OTHER DATE. WHILE MILLENMIN MAY ELECT
TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY
PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE
LAWS.
SOURCE MillenMin Ventures Inc.
