North American Palladium Ltd. ("NAP" or the "Company") is pleased to announce that it has closed the first tranche, for gross proceeds of approximately $27.5 million (the "First Tranche"), of its previously announced public offering of up to $75 million principal amount (in two tranches) of 7.5% convertible unsecured subordinated debentures and associated warrants (the "Offering").
Through the First Tranche of the Offering, the Company sold approximately $27.5 million principal amount of convertible unsecured subordinated debentures (the "Debentures") of NAP at a price of $1,000 per Debenture, including approximately 14.4 million common share purchase warrants (the "Warrants"). The conversion price of the First Tranche Debentures is C$0.635, and the exercise price of the First Tranche Warrants (the exercise of which remains subject to disinterested shareholder approval) is C$0.762.
The First Tranche Debentures will mature on January 31, 2019, unless redeemed or converted earlier, or unless extended, and will bear interest at an annual rate of 7.5% payable semi-annually in arrears on January 31 and July 31 of each year, commencing July 31, 2014. The first interest payment on the Debentures will include accrued and unpaid interest for the period from and including January 31, 2014 to, but excluding, July 31, 2014. Holders may convert their Debentures into common shares of NAP at any time at a conversion rate of approximately 1,575 Common Shares per $1,000 principal amount of Debentures, subject to adjustment in certain circumstances.
Subject to disinterested shareholder approval, the Warrants will entitle the holders thereof to purchase up to 33.33% of the number of common shares of NAP into which the principal amount of Debentures purchased by the holders are convertible at the initial fixed conversion price (excluding common shares issuable as interest, make-whole amounts or otherwise), at any time before 5:00 p.m. (Toronto time) on the third anniversary of the date that shareholder approval is received. If shareholder approval is not obtained by March 30, 2014, the warrants will terminate.
The syndicate of agents was led by Edgecrest Capital Corporation and included Canaccord Genuity Corp. in Canada, and Canaccord Genuity Inc. in the United States, as the exclusive placement agents for the Offering. The previously mentioned lead investor is no longer involved with the Offering and has been replaced by other investors.
Additional Information About the Offering
The net proceeds from the Offering are expected to be used for general corporate purposes. The TSX has approved the listing of the Debentures. The warrants are not listed, and the debentures are not listed on the NYSE MKT. The Company's common shares trade on both the TSX and the NYSE MKT.
The second tranche of the Offering (as well as the exercise of the Warrants issued in the First Tranche) is subject to disinterested shareholder approval. The Company expects to hold a shareholder meeting on or around March 18, 2014, or on such other date as the Company determines. The completion of the second tranche of the Offering is subject to the approval of the TSX, NYSE MKT, all other necessary regulatory approvals and the settlement of definitive documentation, among other conditions. If approved by shareholders, the Company expects to close the second tranche of the Offering on or around March 30, 2014. There can be no assurance that the second tranche of the Offering will close when anticipated or at all, or that the terms will not change.
The Company filed a final base shelf prospectus and a final prospectus supplement (including an amended final prospectus supplement) with the securities regulatory authorities in Canada and a prospectus supplement (including an amended final prospectus supplement) and registration statement (including a base prospectus) and a final prospectus supplement with the U.S. Securities and Exchange Commission ("SEC") for the Offering. The offering in Canada was made only by the base shelf prospectus and the amended final prospectus supplement.
Before investing, readers are encouraged to read the base shelf prospectus, the registration statement and the amended prospectus supplement and other documents the Company has filed with the securities regulatory authorities in Canada and the SEC for more complete information. You may get these documents for free by visiting SEDAR at www.sedar.com or EDGAR at www.sec.gov. Alternatively, the lead agent (Edgecrest Capital Corporation) can arrange to send you the Offering documents if you so request by calling toll-free 1 (877) 257-7366 at 70 York Street, Suite 1500, Toronto, Ontario, M5J 1S9.
About North American Palladium
NAP is an established precious metals producer that has been operating its Lac des Iles mine ("LDI") located in Ontario, Canada since 1993. LDI is one of only two primary producers of palladium in the world, offering investors leverage to the rising price of palladium. The Company's shares trade on the NYSE MKT under the symbol PAL and on the TSX under the symbol PDL.
Source: http://www.napalladium.com/