Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI)
(“
Fortuna” or the “
Company”) is
pleased to announce that it has completed its previously announced
bought deal offering (the “
Offering”) of senior
subordinated unsecured convertible debentures (the
“
Debentures”). The Company issued an
aggregate principal amount of US$40 million Debentures at a price
of US$1,000 per Debenture.
The Debentures mature on October 31, 2024 and
will bear interest at a rate of 4.65% per annum, payable
semi-annually in arrears on the last business day of April and
October in each year, commencing on April 30, 2020. The
Debentures will be convertible at the holder’s option into common
shares in the capital of the Company (“Common
Shares”) at a conversion price of US$5.00 per share (the
“Conversion Price”), representing a conversion
rate of 200 Common Shares per US$1,000 principal amount of
Debentures, subject to adjustment in certain circumstances.
Subject to certain exceptions in connection with
a change of control of the Company, the Debentures will not be
redeemable by the Company prior to October 31, 2022. On or
after October 31, 2022 and prior to October 31, 2023, the
Debentures may be redeemed in whole or in part from time to time at
the Company’s option at a price equal to their principal amount
plus accrued and unpaid interest, provided that the volume weighted
average trading price of the Common Shares on the NYSE for the 20
consecutive trading days ending on the fifth trading day preceding
the date on which the notice of the redemption is given is at least
125% of the Conversion Price. On and after October 31, 2023,
the Debentures may be redeemed in whole or in part from time to
time at the Company’s option at a price equal to their principal
amount plus accrued and unpaid interest regardless of the trading
price of the Common Shares.
The Offering was conducted by a syndicate of
underwriters co-led by CIBC Capital Markets and Scotiabank, and
including BMO Capital Markets (collectively, the
“Underwriters”). The Company has also
granted an over-allotment option to the Underwriters, entitling
them to purchase, for a period of 30 days from the closing of the
Offering, up to US$6 million principal amount of additional
Debentures at the offering price of US$1,000 per Debenture, to
cover over-allotments, if any.
The Company will use the net proceeds from the
Offering for working capital in relation to the start-up of the
Lindero project and for general working capital purposes.
The Debentures were offered for sale by way of a
short form prospectus (the “Prospectus”) in each
of the provinces of Canada, except Québec, and in the United States
on a private placement basis pursuant to an exemption from the
registration requirements of the United States Securities Act of
1933, as amended (the “U.S. Securities Act”), and
certain other jurisdictions.
This news release does not constitute an offer
of securities for sale in the United States. The securities have
not been and will not be registered under the U.S. Securities Act,
and may not be offered or sold in the United States or to a U.S.
person (as defined in Regulation S under the U.S. Securities Act)
absent registration or an applicable exemption from the
registration requirements of the U.S. Securities Act.
About Fortuna Silver Mines
Inc.
Fortuna is a growth oriented, precious metals
producer focused on mining opportunities in Latin America.
The Company’s primary assets are the Caylloma silver mine in
southern Peru, the San Jose silver-gold mine in Mexico and the
Lindero gold project, currently under construction, in
Argentina. The Company is selectively pursuing acquisition
opportunities throughout the Americas and in select other areas.
For more information, please visit our website at
www.fortunasilver.com.
ON BEHALF OF THE BOARD
Jorge A. Ganoza President, CEO and
DirectorFortuna Silver Mines Inc.
Trading symbols: NYSE: FSM | TSX: FVI
Investor Relations:
Carlos BacaT (Peru): +51.1.616.6060, ext. 0E:
info@fortunasilver.com
The Toronto Stock Exchange and the New York
Stock Exchange have not reviewed and do not accept responsibility
for the accuracy or adequacy of this news release, which has been
prepared by management.
Forward Looking Statements
This news release contains forward looking
statements which constitute “forward looking information” within
the meaning of applicable Canadian securities legislation and
“forward looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995 (collectively, “Forward looking Statements”). All
statements included herein, other than statements of historical
fact, are Forward looking Statements and are subject to a variety
of known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those reflected
in the Forward looking Statements. The Forward looking Statements
in this news release include, without limitation, statements about
the anticipated use of its net proceeds and whether the
over-allotment option will be exercised. Often, but not always,
these Forward looking Statements can be identified by the use of
words such as “estimated”, “potential”, “open”, “future”,
“assumed”, “projected”, “used”, “detailed”, “has been”, “gain”,
“planned”, “reflecting”, “will”, “containing”, “remaining”,
“to be”, or statements that events, “could” or “should” occur or be
achieved and similar expressions, including negative
variations.
Forward looking Statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any results, performance or achievements
expressed or implied by the Forward looking Statements. Such
uncertainties and factors include, among others, whether the
Company’s activities at its properties will proceed as planned;
delays in construction at the Lindero Project; delays in
commissioning of the mine at Lindero; delays in the commencement of
commercial production; changes in general economic conditions and
financial markets; changes in prices for silver, gold and other
metals; technological and operational hazards in Fortuna’s mining
and mine development activities; risks inherent in mineral
exploration; uncertainties inherent in the estimation of mineral
reserves, mineral resources, and metal recoveries; governmental and
other approvals; political unrest or instability in countries where
Fortuna is active; labor relations issues; as well as those factors
discussed under “Risk Factors” in the Company's Annual Information
Form. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in Forward looking
Statements, there may be other factors that cause actions, events
or results to differ from those anticipated, estimated or
intended.
The Company believes that the assumptions and
expectations reflected in the forward looking information contained
in this news release are reasonable, but undue reliance should not
be placed on them because the Company can give no assurance that
they will prove to be correct. Since statements in respect of
forward looking information address future events and conditions,
by their very nature they involve inherent risks and uncertainties.
The forward looking information contained in this news release is
made as of the date hereof and the Company undertakes no obligation
to update publicly or revise any forward looking information,
whether as a result of new information, future events or otherwise,
unless so required by applicable securities laws.
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