Lion Copper and Gold Corp (TSX-V:LEO, OTCQB:LCGMF) announced that it is proposing to carry out a debt restructuring transaction whereby it is offering to holders of its convertible debentures due in 2024 the option to replace the debentures with accrued interest with new convertible debentures or for shares.
The company said that in June and July of 2022, it issued 14% unsecured existing debentures with an aggregate principal amount of US$2 million and 29,850,738 detached warrants.
In March of 2023, it also issued 14% unsecured existing debentures with an aggregate principal amount of US$1,306,172 and 18,461,015 detached warrants with these debentures.
The existing debentures were originally issued with a maturity date of 20 months from the date of issuance, and the detached warrants expire on the maturity date.
Under the replacement offer, an aggregate of up to US$3,950,113 in principal amount of senior unsecured new debentures plus accompanying detached warrants would be issued to replace the existing debentures that elect to participate.
Lion Copper and Gold said that the new debentures would have a maturity date of 12 months and bear interest at a rate of 20% per year, with the interest convertible into shares.
The company said that existing debentures that choose to not take up the replacement offer can instead convert both the principal and interest of their existing debentures into units of the company at US$0.045 per unit.
Each unit will consist of a share and share purchase warrant exercisable into an additional share at US$0.06 for five years from the date of issuance.
Lion Copper and Gold is a Canadian-based company advancing its flagship copper project at Yerington, Nevada, through an option to earn-in agreement with Rio Tinto.