Calgary, AB - TheNewswire - November 29, 2023 - Whitemud Resources Inc. (“Whitemud” or the “Company”) (TSXV:WMK) announces proposed rights offering and release of third quarter financial results and provides update on Board and interim financing.

 

Whitemud is pleased to announce that its Board of Directors has authorized the Company to take the necessary steps to undertake a proposed offering (the “Offering”) of rights (the “Rights”) that will entitle holders of common shares (“Common Shares”) of the Company on the applicable record date to purchase up to Cdn$10 million aggregate principal amount of unsecured subordinated debentures of the Company (the “Debentures”).  The Debentures will have a maturity date five years after issuance thereof and will bear interest at a rate of 8.5% per annum. Interest will be payable quarterly in arrears in equal installments.  It is expected that, as a loan bonus, debenture holders will each be issued one warrant (“Warrant”) for each dollar of Debenture held. The Company will issue up to a maximum of ten million Warrants. The Warrants will (i) have an exercise price equal to the then current Market Price of the common shares; (ii) entitle the holder to receive one common share on exercise; (iii) have a term of five years; and (iv) be non-transferable.  Pursuant to TSXV policy, the term of the Warrants may be shortened on early repayment of all or a portion of the indebtedness under the Debentures.

 

The Offering is still subject to TSXV approval.  The Company intends to announce pricing and more detailed terms concurrently with the filing of a preliminary prospectus.

 

SAM Holdings Ltd. (“SAM”), a 44% shareholder of the Company has advised the Company that it intends to subscribe for its proportionate share of the Rights. Should subscriptions fall below the maximum available, SAM will subscribe for its proportionate share of the Rights actually issued by the Company.

 

The Company expects to qualify the Debentures and Warrants by the filing of a short form prospectus and the current intention of the Company is to file a preliminary prospectus with respect to the Offering in Q1, 2024.

 

The Offering will be used to fund a previously announced capital program for $7 million to reconfigure its kaolin calcination process at its Wood Mountain facility, which includes amounts drawn against a previously announced interim loan (the “Loan”) of up to $7 million by SAM Holdings Ltd., the Company’s major shareholder, which loan is at 5% interest per annum, secured by a general security agreement and to be drawn down as required. The Loan and the terms of the Offering are subject to TSXV approval.

 

The Company also announces that it has released its financial statements and Management Discussion and Analysis for the third quarter ended September 30, 2023.

 

Whitemud is also pleased to announce recent changes to its board of directors. The board is now  comprised of Stan Owerko, Vince Davoli, Randy Findlay, Stanley Odut and Kelly Soucy. The board has established an Audit Committee comprised of Messrs. Findlay, Odut and Soucy, a Compensation, Human Resources and Health Safety and Environment Committee comprised of Messrs. Davoli, Odut, Findlay and Owerko and a Governance Committee comprised of Messrs, Findlay, Davoli and Soucy.

  

About Whitemud Resources Inc.

Whitemud is a Canadian-based corporation holding mineral rights to exploit a large kaolin deposit in southern Saskatchewan, together with a processing facility located on the property. Whitemud’s product, Whitemud (MK) is a cement-grade metakaolin that enhances the performance of cement for oil and gas wells and construction applications. The Company’s capital budget and upgraded calcining process minimizes environmental impact.

 

Midstream Energy Partners, a division of Whitemud Resources Inc. formed in 2015, engages in the business of commodity marketing and logistics.

 

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities of the Company.

  

Reader Advisory

 

This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Whitemud’s business and affairs.  In certain cases, forward-looking statements can be identified by the use of words such as ‘‘attempts’’, ‘‘intends’’, “continues”, “plans” 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’’.  These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.  Although Whitemud believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon.  Such statements include statements with respect to the feasibility of designing a full scale production flash calciner and the resulting energy efficiency, lower carbon emissions and greater competitiveness in the marketplace, the statement that the financing being provided is interim implying replacement financing in the future. Actual results could differ materially from those anticipated in these forward-looking statements. The technology may not be sufficiently developed to design the full scale production flash calciner or such development may not be economical. If developed, such flash calciner may not achieve the anticipated energy efficiency or reduced carbon emissions. The product’s competitiveness in the marketplace may not be improved. The Loan may not receive TSXV approval. The Proposed Offering may not receive the requisite regulatory approval and may not raise sufficient funds to achieve its goals. Results could be impacted by prevailing economic conditions and other factors, many of which are beyond the control of Whitemud. The forward-looking statements contained in this news release represent Whitemud’s expectations as of the date hereof and are subject to change after such date. Whitemud disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.  

    

For further information, please contact:

 

Whitemud Resources Inc.

General Inquiries

Suite 900, 332 - 6th Avenue SW

Calgary, Alberta T2P 0B2

Attention: Stan Owerko: 403-200-5253

  

Neither the TSXV 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.

 

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