Huldra Silver Inc. launches secured convertible debenture private placement

VANCOUVER, B.C, October 6, 2014 – Huldra Silver Inc. (“Huldra” or the “Company“) is now launching its previously announced secured convertible debenture financing to raise gross proceeds of up to $8,000,000 (the “Financing”). The Financing is expected to be completed in multiple tranches. The Company seeks to raise at least $5,000,000 pursuant to the first tranche of the Financing (the “First Tranche”).

The Company seeks to issue secured convertible debentures (the “Debentures”) in the First Tranche which will include the following key terms:

  • the minimum aggregate principal amount of the Debentures issued pursuant to the First Tranche will be $5,000,000;
  • the Debentures will bear interest at a rate of 10% per annum, which interest shall be payable annually as to 50% in cash and as to 50% by the issuance of common shares in the capital of the Company (a “Share”), at a price per Share equal to the market price at the time of issuance;
  • the Debentures will mature three years after the date of issuance (the “Maturity Date”), and the principal amount of the Debentures, together with any accrued and unpaid interest shall be payable on the Maturity Date;
  • the principal amount of the Debentures shall be convertible into Shares prior to the Maturity Date, at the option of the holder, at a deemed price of $0.055 per Share;
  • for each $1,000 in principal of Debentures, the Company will issue 1,000 common share purchase warrants (each, a “Warrant”), with each Warrant exercisable into one additional Share (each, a “Warrant Share”) for four years from the date of issuance of the Warrant at an exercise price of $0.075 per Warrant Share in the first year after issuance and $0.10 per Warrant Share thereafter;
  • the repayment of the outstanding principal and interest of the Debentures will be secured against the assets of Huldra but will rank subordinate to the debt owed to Waterton Global Value L.P. (“Waterton”) until such time as the debt owing to Waterton is repaid in full; and
  • upon repayment by the Company of all amounts owed to Waterton, the holders of the Debentures issued pursuant to the First Tranche will be granted an aggregate 2% net smelter returns royalty with respect to the Company’s Treasure Mountain mine, provided that each holder of Debentures issued pursuant to the First Tranche shall only be entitled to their pro rata share of such royalty based on their individual investment pursuant to the First Tranche.

The terms of the Debentures offered pursuant to subsequent tranches of the Financing, other than the First Tranche, including the interest rate, maturity date, conversion price and exercise price of the underlying warrants have not been determined at this time. Such terms, when determined, will be subject to approval of the TSX Venture Exchange (the “Exchange”).

The proceeds of the First Tranche are intended to be used to settle amounts owed to certain creditors of the Company in accordance with the Plan of Compromise and Arrangement (the “Plan”) which was approved by creditors on September 23, 2014, to further the Company’s post-restructuring business plan and for general working capital purposes. The Plan remains subject to final approval of the Supreme Court of British Columbia.

The closing of the Financing, including the First Tranche, remains subject to approval of the Exchange. The Company may pay finder’s fees in connection with the Financing. All securities issued pursuant to the Financing are expected to be subject to a hold period of four months and one day. In addition, the Exchange may impose additional escrow requirements with respect to certain securities issued to insiders pursuant to the Financing.

For additional details regarding the Financing, please see the Company’s news releases dated June 10, 2014, August 8, 2014 and August 25, 2014.

Huldra’s Post-Restructuring Business Plan

Following completion of its restructuring under the Companies’ Creditors Arrangement Act (Canada), the Company intends to focus on transforming its Merritt Mill Property into a processing facility for mill feed for other gold and silver mining companies as there are significant costs associated with securing land, purchasing and building a processing mill, and a lined tailings facility. Such a facility would provide the opportunity for other companies to avoid the significant capital expenditure requirements necessary to build such a processing facility. In addition, the Company intends to resume exploration activities at its Treasure Mountain Project.

On behalf of the Board of Directors:

Garth Braun
CFO & Director

For additional information:
Contact: Garth Braun (604) 647-0142

Disclaimer for Forward-Looking Information

This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events including: (i) that Huldra will be able to complete the Financing on the terms described herein, or at all, (ii) that holders of the Debentures will be able to convert the Debentures at the conversion price stated in this news release, (iii) that the Exchange will approve the Financing, (iv) that there will be no amendments to the terms of the Financing other than as stated in this news release, (v) that finder’s fees may be payable in connection with the Financing, (vi) that the resale restrictions on the securities to be issued pursuant to the Financing will be as stated in this news release., (vii) that Huldra will be able to restructure its financial affairs, (viii) that Huldra will be able to compromise and settle its outstanding debt as set out herein or at all, (ix) that Huldra will obtain the requisite approvals to proceed with the Plan, and (x) that the Company will be able to carry out its business plan as stated herein. No assurance can be given that any of the events anticipated by the forward-looking statements will occur as planned or at all, or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause the Company’s actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) that Huldra is unable to raise the funds necessary to complete the Financing, or that the Financing if completed, will not be completed on terms favourable to the Company, (2) that the Exchange may not approve the closing of the Financing, (3) that the resale restrictions on the securities, if any, issued pursuant to the Financing will be different than stated in this news release, (4) that Huldra is unable to make arrangements with its creditors or that it will not be able to complete its restructuring, (5) that Huldra will be unable to recommence operations at its mine and mill for any reason whatsoever, (6) a downturn in general economic conditions in North America and internationally, (7) volatility and fluctuation in the prices of silver, lead and zinc, (8) volatility and fluctuation in the price of the Company’s stock and stock of resource issuers generally, (9) the uncertainty involved in Court proceedings and the implementation of a plan of restructuring under the CCAA proceeding, and (10) other factors beyond the Company’s control. Readers are cautioned that the foregoing list of factors is not exhaustive. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Except as required by law, the Company assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change.

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.

The information in these press releases is historical in nature, has not been updated, and is current only to the date indicated in the particular press release. This information may no longer be accurate and therefore you should not rely on the information contained in these press releases. To the extent permitted by law, Nicola Mining Inc. and its employees, agents and consultants exclude all liability for any loss or damage arising from the use of, or reliance on, any such information, whether or not caused by any negligent act or omission.