VANCOUVER, B.C., September 13, 2013 Catalyst Copper Corp. (Catalyst or the Company) announces that it is undertaking an offering of $300,000 in convertible notes (the “Notes”), an increase from the original offering of $150,000 of Notes announced in its press release dated August 20, 2013.
The Notes have a term of five years and bear interest at a rate of 10 percent per annum, payable quarterly in arrears. The Notes provide that the holder of a Note may, at any time and from time to time, convert all or any part of the principal then outstanding under the Note into units of the Company (Units), comprised of (a) one common share of the Company; and (b) one share purchase (a Warrant) exercisable for one common share of the Company for five years following the Closing Date at a price of $0.05 per Common Share. Assuming no other adjustments are made pursuant to the terms of the Notes, if entirety of the Principal Amount is converted during the first year following the Closing Date, 6,000,000 Units will be issued upon such conversion, and if the entirety of the Principal Amount is converted thereafter, 3,000,000 Units will be issued upon such conversion. Any accrued but unpaid interest not paid when it is due may be paid in common shares at the Note holders option at the then applicable discounted market price permitted under applicable stock exchange rules.
$150,000 of the Notes being sold in the offering will be purchased by John Greenslade, the President and CEO of the Company, and by a company controlled by Mr. Greenslade.
The Company intends to use the net proceeds of the Offering to pay ongoing site maintenance costs at the La Verde project and for general working capital.
The offering is subject to TSX Venture Exchange approval, which is expected to be obtained shortly following the date of this release. Closing of the offering will take place promptly upon receipt of such approval.
About La Verde
La Verde is located in an area with excellent infrastructure: Power, rail and water. Lazaro Cardenas, Mexicos third largest port on the Pacific Ocean is 180 km from the site. Significant upside potential remains for the two known zones of porphyry style copper, gold and silver mineralization as drill programs have shown both deposits remain open to depth and along strike.
La Verde property is subject to an option agreement with a Mexican subsidiary of Teck Resources Limited (Teck) whereby Catalysts 100% Mexican subsidiary, Minera Hill 29, has earned a 60% interest in La Verde by completing US$10,000,000 in exploration expenditures (including 30,000 meters of drilling and 200 kilometers of IP) by December 31, 2012. Catalyst has delivered notice to Tecks Mexican subsidiary that it has met its expenditure commitments. Tecks subsidiary has the option (the T-1 Option), by providing notice to Catalyst, to increase its interest to 60% by incurring aggregate expenditures equal to two times the amount spent by Catalyst.
Further to the above Tecs subsidiary has granted Catalyst the Purchase Option, whereby Catalyst has 180 days from April 9, 2013 to acquire Tecks interest in the La Verde property by paying to Tech, or to its order, the sum of (a) an amount equal to all expenditures incurred by Teck in regards to the La Verde Project form January 2, 2013 to the day immediately prior to the date Catalyst exercises the Purchase Option (the Exercise Date), plus either (1) making a cash payment of US$20 million to Teck; or (2) making a payment of US$25 million to Teck in a combination of cash and shares (or Catalyst), provided that at least 50% of the consideration is in cash, with the remainder of the consideration paid in shares of Catalyst; provided that Tecks ultimate shareholding in Catalyst does not exceed 19.9%, post issue. The Purchase Options Agreement provides that if Catalyst does not exercise the Purchase Option the date Teck may elect to invoke its option to increase its interest in the property from 40% to 60% will be extended to the date that is 181 days from April 9, 2013. If Catalyst exercises the Purchase Option, the T-1 expires on the closing of the purchase of Tecks interest. The property is subject to an underlying 0.5% NSR Royalty.
CATALYST COPPER CORP.
“John W. Greenslade
JOHN GREENSLADE, PRESIDENT & CEO
For further information please contact Corporate Communications Officer: Denby Greenslade (604) 638-5900.
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company, including, but not limited to, risks associated with mineral exploration and mining activities, the impact of general economic conditions, industry conditions, dependence upon regulatory approvals, and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Neither 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.