PE-backed Huldra Silver enters restructuring agreement

Huldra Silver Inc, a Vancouver-based silver mining, exploration and development company, has entered into a restructuring agreement with Canadian private equity firm Waterton Global Resource Management and Concept Capital Management. Under the agreement’s terms, Concept will subscribe or arrange for secured convertible debentures of up to $8 million. Huldra also will restructure its debt owing to Waterton, which has been the company’s primary creditor, and restructure its existing debentures and other debt owing. Huldra said the deal is key to its exiting creditor protection under the Companies’ Creditors Arrangement Act (Canada).


Huldra Silver Enters Into Restructuring Agreement with Concept Capital Management and Waterton Global Value, L.P.

VANCOUVER, B.C, June 9, 2014 – Huldra Silver Inc. (“Huldra” or the “Company”) is pleased to announce that Concept Capital Management Ltd. (“CCM”) and Waterton Global Value, L.P. (“Waterton”) have entered into a letter agreement (the “Agreement”) pursuant to which the parties have proposed a restructuring of the affairs of Huldra. As part of the restructuring:

CCM has agreed to subscribe for, or will arrange subscriptions for, secured convertible debentures in the aggregate principal amount of up to $8,000,000 (collectively, the “Debentures”);
Huldra will restructure its debt owing to Waterton; and
Huldra will restructure its existing debentures and other debt owing
(collectively, the “Restructuring”).

The Agreement is a key step towards restructuring Huldra’s outstanding obligations and will allow Huldra to put forth a proposal to the Supreme Court of British Columbia (the “Court”) that may allow it to exit creditor protection under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA Proceedings”). The Company and Waterton have reviewed expressions of interest for restructuring transactions from other groups and have concluded that this proposal is the best proposal for the Company.

Frank Högel, representative of CCM states “We believe that Huldra has a portfolio of valuable assets, including Thule Copper, a large potential aggregate resource, Treasure Mountain and its milling facility, located near Merritt, BC. Given the extensive fully-owned land, permitting and completed mill structure and the difficulties for projects located in the Nicola, Interior and Okanagan regions to receive mill permitting, we believe the site can be a mining project consolidator for the region.”

Issuance of Debentures

Huldra will issue the Debentures from time to time as such funds are required by Huldra and in such number of tranches as agreed upon by Huldra and CCM, with the first tranche of Debentures (the “First Tranche”)being at least $5,000,000. The First Tranche of the Debentures shall bear interest at a rate of 10% per annum, which interest shall be payable annually, 50% in cash and 50% by the issuance of common shares in the capital of Huldra (each, a “Share”). The Debentures will be repayable in three years (the “Maturity Date”). For each $1,000 in principal of Debentures, Huldra will issue 1,000 share purchase warrants (each, a “Warrant”). The Debentures are convertible into Shares at a conversion price of $0.05 per Share prior to the Maturity Date. Each Warrant is exercisable into one additional Share for four years from the date of issuance at an exercise price of $0.075 per Warrant Share in the first year after issuance and $0.10 per Warrant Share thereafter. The Debentures will rank subordinate to the Waterton Debt (as defined below) until such time as the Waterton Settlement Amount (as defined below) is paid to Waterton, by Huldra, in full.

Restructuring of Amounts Owed to Waterton

Huldra and Waterton will settle all amounts owed by Huldra to Waterton (collectively, the “Waterton Debt”) as follows:

Huldra will pay an aggregate of $6,500,000 (the “Waterton Settlement Amount”)to Waterton as follows:
Huldra will pay interest to Waterton at a rate of 3% per annum on the portion of the Waterton Settlement Amount which remains outstanding until such time as the full Waterton Settlement Amount and interest thereon has been repaid, with such interest to be paid on each payment of the Waterton Settlement Amount;
Waterton will convert the portion of the Waterton Debt remaining after the subtraction of the Waterton Settlement Amount from the Waterton Debt into Shares at a price of $0.05 per Share;
upon payment by Huldra to Waterton of the Waterton Settlement Amount and interest thereon in full, Waterton will (i) terminate the net smelter returns royalty it holds with respect to Huldra’s Treasure Mountain Property, and (ii) discharge all security interests it has in the assets and property of Huldra.
(i) $2,500,000 on the closing date of the Restructuring (the “Closing Date”),
(ii) $1,500,000 on or before the date that is 6 months from the Closing Date, and
(iii) $2,500,000 on or before the date that is 12 months from the Closing Date;

Restructuring of Amounts Owed under Existing Debentures

Huldra will use commercially reasonable efforts to cause the holders of the existing debentures, in the aggregate principal amount of $10,003,800 (the “Existing Debenture Debt”), plus accrued interest thereon, to convert such outstanding amounts into Shares at $0.05 per Share.

Restructuring of Amounts Owed to Other Creditors

Huldra will use commercially reasonably efforts to negotiate and enter into settlement agreements with its other creditors, including without limitation the trade creditors, on or before the Closing Date, provided that such settlements shall be satisfactory to CCM and Waterton, acting reasonably, and approved by the Court and the TSX Venture Exchange (the “Exchange”), as required.

Approval for Restructuring

The Restructuring will require the approval of the Exchange, the creditors in the CCAA Proceeding and the Court. In addition, if required by the Exchange, the Court or applicable corporate or securities laws, Huldra will use commercially reasonable efforts to obtain approval of its shareholders and other security holders, as applicable, for the Restructuring. The successful emergence of Huldra and its subsidiaries from the CCAA Proceedings and full implementation of the Restructuring are expected to be subject to numerous conditions and approvals. There can be no assurance that all required conditions will be met and all required approvals obtained nor that the Company will ultimately emerge from the CCAA Proceedings.

On behalf of the Board of Directors

“Peter Espig”


Interim CEO & Director

For additional information

Contact: Garth Braun

Disclaimer for Forward-Looking Information

This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events including: (i) that Huldra will be able to restructure its financial affairs, including completion of the proposed Restructuring, (ii) that Huldra will be able to complete the offering of the Debentures, (iii) that Huldra will be able to restructure the Existing Debenture Debt and such other outstanding debt, and (iv) that Huldra will obtain the necessary approvals from the Court, the creditors in the CCAA Proceeding, the Exchange and shareholders, as applicable. No assurance can be given that any of the events anticipated by the forward-looking statements will occur as planned or at all, or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause the Company’s actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) that Huldra is unable to secure additional financing or make arrangements with its creditors or that it will not be able to complete the Restructuring, including without limitation the offering of the Debentures, (2) that Huldra will be unable to recommence operations at its mine and mill for any reason whatsoever, (3) that the timing and duration under the CCAA Proceeding may be shorter than expected, (4) a downturn in general economic conditions in North America and internationally, (5) volatility and fluctuation in the prices of silver, lead and zinc, (6) volatility and fluctuation in the price of the Company’s stock and stock of resource issuers generally, (7) the uncertainty involved in Court proceedings and the implementation of a plan of restructuring under the CCAA Proceeding, and (8) other factors beyond the Company’s control. Readers are cautioned that the foregoing list of factors is not exhaustive. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Except as required by law, the Company assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change.

Neither the TSX Venture Exchange 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.

Photo courtesy of Huldra Silver Inc