Vancouver, British Columbia--(Newsfile Corp. - August 24, 2020) - Tethyan Resource Corp. (TSXV: TETH) ("Tethyan") and Adriatic Metals Plc ("Adriatic") are pleased to announce that Adriatic, Tethyan and one of its subsidiaries have entered into an amendment (the "Amendment") to the secured convertible loan agreement dated May 10, 2020 (the "Loan") between the parties. Pursuant to the Amendment, Adriatic agreed to advance to Tethyan an additional €500,000, bringing the total principal amount of the Loan from Adriatic to €1,800,000. Tethyan has submitted a borrowing request for the full amount of the advance, and it is expected to be made on or before August 28, 2020.
Proceeds from the additional advance will be used for exploration and drilling expenses on Tethyan's Kizevak and Sastavci properties, reasonable expenses incurred in the ordinary course of business, and expenses in connection with the plan of arrangement with Adriatic (the "Arrangement").
Key terms of the Loan, as amended, include the following:
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Interest rate of 10% per annum, compounding monthly;
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Repayment due on the earliest of May 10, 2021, the termination of the Arrangement and the completion of the Arrangement;
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Conversion of the initial €1,300,000 at the option of Adriatic at any time following the termination of the Arrangement into common shares of Tethyan at a price of C$0.15 per share, and the additional €500,000 at a price of C$0.40 per share, with the conversion price applicable to any accrued interest being the market price (as defined by the TSX Venture Exchange) on the day immediately preceding any conversion date;
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Security over Tethyan's Serbian assets; and
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Other such terms as are customary for a convertible loan of this nature.
The Amendment to the Loan is subject to final acceptance of the TSX Venture Exchange. If any shares are issued in connection with the amendment to the Loan, they will be subject to a four month and one day hold period commencing from the date of advance.
Early Warning
Further to Adriatic's news release dated May 11, 2020, the following information is being provided by Adriatic pursuant to Section 3.1 of Canadian National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Requirements ("NI 62-103").
Prior to the Amendment, Adriatic was deemed to have control and direction and beneficial ownership of 13,086,666 common shares of Tethyan, representing 14.1% of the then issued and outstanding common shares of Tethyan underlying its conversion rights under the Loan with respect to €1,300,000 of the aggregate principal amount thereunder. As a result of the Amendment and on advance of an additional €500,000 (C$755,000) to Tethyan thereunder, Adriatic's conversion rights would entitle it to acquire control and direction and beneficial ownership of an additional 1,887,500 common shares, representing a further 2.0% of the then issued and outstanding common shares of Tethyan, which together with its conversion rights prior to the Amendment would entitle it to acquire control and direction and beneficial ownership of 14,974,166 common shares, representing a total of 15.8% of the then issued and outstanding common shares of Tethyan.