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CANCELLATION OF S336027 Share price movement
Forbes & Manhattan Coal Corp.
(Registration number: 002116278)
(External company registration number: 2011/011661/10)
Share code on the Toronto Stock Exchange: FMC
Share code on the JSE Limited: FMC
ISIN: CA3451171050
(“Forbes Coal” or “the Company
FORBES COAL CLOSES US$6 MILLION LOAN FACILITY
TORONTO, ONTARIO – September 4, 2013: Forbes & Manhattan Coal
Corp. (TSX: FMC) (JSE: FMC) has closed the secured US$6 million
convertible loan facility from Resource Capital Fund V L.P
(“RCF”) (the “Transaction”). The loan facility is to be used for
general working capital in relation to Forbes Coal’s operations
and exploration properties in Dundee, South Africa. Subject to
receipt of shareholder approval, the loan facility is
convertible into common shares of Forbes Coal at a price of
C$0.36 per common share.
Prior to receipt of shareholder approval, the loan will bear
interest at a rate of 10% per annum, payable on each calendar
quarter. Upon receipt of shareholder approval, the interest rate
will decrease to 8% per annum. If shareholder approval is not
obtained, the interest rate of the loan will increase to 15% per
annum and the maturity date will be accelerated to June 30,
2014.
If Forbes Coal receives the requisite shareholder approval, a
total of US$1,363,397 of interest will be payable under the loan
and RCF will have the right to receive interest payments under
the loan in common shares. Such common shares will be priced and
issued based on the 20-day VWAP prior to the relevant interest
payment date.
In connection with the Transaction, RCF will receive a 3%
establishment fee payable in cash or, at the option of RCF,
common shares, subject to shareholder approval. Any common
shares issued in lieu of the establishment fee will be issued at
a price of C$0.36 per common share.
The issuance of common shares to RCF upon conversion of the
loan, interest payments and for the establishment fee are
subject to shareholder approval which will be sought at the
upcoming annual and special meeting to be held on September 11,
2013, in preparation for which the Company has mailed an amended
and restated management information circular to its
shareholders. Pursuant to the policies of the TSX and
Multilateral Instrument 61-101 (“MI 61-101”), RCF will not vote
on the resolution approving the issuances of the common shares
to RCF under the Transaction.
Provided that the loan is outstanding and RCF holds common
shares or the right to acquire common shares equal to at least
15% of the issued and outstanding common shares of Forbes Coal,
RCF has the right to participate in any future financings by
Forbes Coal on a pro rata basis to its partially diluted
shareholding.
In addition, provided that the loan is outstanding or if RCF
holds common shares or the right to acquire common shares equal
to at least 15% of the issued and outstanding common shares, RCF
will have the right to nominate one individual to the board of
directors.
Forbes Coal also continues to market its non-brokered private
placement of common shares at a price of $0.36 per common share
for gross proceeds of up to $2 million. RCF will not be
participating in the private placement. However, if shareholder
approval is received for the conversion feature of the loan,
concurrent with the closing of the private placement of common
shares, RCF will convert up to $2 million of the loan into
common shares at a price of $0.36 per common share. The private
placement is expected to close on or about September 18,
2013.The closing of the private placement remains subject to
receipt of regulatory approval.
RCF currently owns 6,867,443 (19.97%) of the issued and
outstanding common shares of Forbes Coal on a non-diluted basis.
Assuming an exchange rate of C$1.00 = US$1.00 and a 20-day VWAP
of C$0.32 (being the 20 day VWAP as of August 9, 2013), if RCF
converts the entire amount of the loan, receives the
establishment fee in common shares, and receives all interest
payments under the loan in common shares, RCF will be issued an
aggregate of 21,427,284 common shares. Should other shareholders
not elect to participate in the private placement, this would
result in RCF holding an aggregate of 28,294,767 (50.1%) of the
issued and outstanding common shares of Forbes Coal.
About Forbes Coal
Forbes Coal is a growing coal producer in southern Africa. It
holds a majority interest in two operating mines through its
100% interest in Forbes Coal (Pty) Ltd., a South African company
("Forbes Coal Dundee") which has a 70% interest in Zinoju Coal
(Pty) Ltd. ("Zinoju"). Zinoju holds a 100% interest in the
Magdalena bituminous mine and the Aviemore anthracite mine in
South Africa (collectively, “the Forbes Coal Dundee
Properties”). Forbes Coal has an experienced coal-focused
management team.
Cautionary Notes:
This press release contains “forward-looking information” within
the meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to,
statements with respect to the convertible loan facility with
RCF and future financial or operating performance of Forbes Coal
and its projects. Generally, forward-looking information can be
identified by the use of forward-looking terminology such as
“plans”, “expects” or “does not expect”, “is expected”,
“budget”, “scheduled”, “estimates”, “forecasts”, “intends”,
“anticipates” or “does not anticipate”, or “believes”, or
variations of such words and phrases or state that certain
actions, events or results “may”, “could”, “would”, “might” or
“will be taken”, “occur” or “be achieved”. Forward-looking
information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of Forbes Coal to be
materially different from those expressed or implied by such
forward-looking information, including but not limited to:
general business, economic, competitive, foreign operations,
political and social uncertainties; a history of operating
losses; delay or failure to receive board or regulatory
approvals; timing and availability of external financing on
acceptable terms; not realizing on the potential benefits of the
proposed transaction; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined;
future prices of mineral products; failure of plant, equipment
or processes to operate as anticipated; accidents, labour
disputes and other risks of the mining industry; and, delays in
obtaining governmental approvals or required financing or in the
completion of activities. Although Forbes Coal has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no
assurance that such 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 forwardlooking information.
The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities
laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
Stephan
Theron
President and Chief Executive Officer
+1 (416) 861-
5912
Email: stheron@forbescoal.com
Colinda Parent
VP Corporate Development
+1 (416) 861-5811
Email: cparent@forbesmanhattan.com
5 September 2013
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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