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Athabasca Minerals Announces Agreement for Disposition of Non-Core Assets and Amended Loan Agreement

Press Release

Edmonton, Alberta – Athabasca Minerals Inc. (TSXV: AMI) (“AMI” or the “Corporation”) announced today that it has executed and closed a definitive sale agreement (the “Sale Agreement”) with an independent, arm’s length purchaser, to divest of certain non-core assets within the aggregates division (the “Disposition” and “Disposed Assets”) for total cash consideration of C$3.2 million, before normal closing adjustments. The Sale Agreement had a closing date of June 27, 2023 and there are no finder’s fee associated with the transaction.

The Disposition includes the sale of five (5) surface mineral leases, including Coffey Lake, the Warrensville South and North properties, two inventory stockpiles, one metallic and industrial minerals lease, and equipment associated with select pits. The Disposed Assets represent less than 5% of the Corporation’s total asset holdings and would require ongoing capital expenditures to support their current growth profiles. The total cash consideration of $3.2 million includes an initial payment of $2.9 million upon closing with $300,000 in holdbacks. $200,000 will be held and then released upon the full assignment and transfer of the leases and an additional $100,000 will be held pending the completion of outstanding regulatory obligations on one of the leases. In addition to the cash consideration, the Disposition is expected to have a positive effect on the Corporation’s working capital as it is anticipated to remove significant environmental reclamation obligation liabilities as well as release over $700,000 in cash deposits that are currently held for these resource properties.

“The Disposition of these non-core assets is consistent with the strategic realignment and restructuring previously announced by the Corporation. This transaction allows us to divest of mainly non-operated assets and will allow the Corporation to focus on its core business, that is the production and sale of premium silica sand. In addition to the cash proceeds from the Disposition, the Corporation will also receive significant reimbursement of cash deposits which will help support our corporate working capital requirements as we continue to assess strategic alternatives for the Corporation,” said Dana Archibald, Chief Executive Officer.

The Corporation also announced it entered into an amended credit agreement (“First Amending Agreement”) for the amendment of the secured bridge loan of $2,000,000 (the “Loan”) from JMAC Energy Services LLC (“JMAC”), as previously announced and entered into on February 28, 2023.

The First Amending Agreement amends the Loan to bear interest at a rate of 14% per annum, provided that the interest rate increases to 20% per annum if there is an event of default. The Loan will mature on October 31, 2023, but may be prepaid in whole or in part at any time with not less than five (5) days prior notice. No bonus securities will be issued in connection with the First Amending Agreement.

JMAC is a related party to Athabasca, as JMAC is controlled by Jon McCreary who is a director of Athabasca, and, as such, the Loan is a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Athabasca is relying on an exemption from the formal valuation and minority approval provisions of MI 61-101 pursuant to sections 5.5(b) and 5.7(f) thereof, respectively.

These transactions remain subject to receipt of all necessary regulatory and other approvals, including the final approval of the TSX Venture Exchange.

ABOUT ATHABASCA MINERALS INC.

The Corporation is an integrated industrial minerals company focused on the production and delivery of frac sand to Canada and the United States. The Corporation also operates aggregate operations in Western Canada and maintains the largest platform for buying, selling and transporting of aggregates through its 100% owned technology platform, AMI RockChain.

For further information, please contact:

Cheryl Grue, Director, Corporate Affairs
Tel: 587-392-5862 / Email:

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