Kazax Minerals Inc. ("Kazax" or the "Company") announces that it intends to complete, subject to the approval of the TSX Venture Exchange (the "Exchange"), a non-brokered private placement (the "Private Placement") for Cdn $3,200,000 in aggregate principal amount of convertible unsecured non-interest bearing debentures (the "Debentures"). The Debentures will be direct, unsecured obligations of the Company, ranking equally with all other unsecured indebtedness of the Company.
The Debentures will mature and become payable on the date that is three years from the date of issuance (the "Maturity Date"). Upon receipt of (i) all necessary approvals from the Kazakh Ministry of Industry and New Technologies; and (ii) approval by the requisite majority of shareholders of the Company on or before the Maturity Date for the Debentures, the principal amount of the Debentures will automatically be converted into units of the Company (the "Units"); provided, however, (iii) that the Debentures will only be converted into Units where such conversion would not result in a reduction in the existing percentage of common shares of the Company held by persons other than insiders or their associates and affiliates and not subject to resale restrictions.
The conversion of the Debentures into Units shall be at a conversion price of: (i) Cdn $0.05 per Unit if conversion occurs within the first year of issuance; and (ii) Cdn $0.10 per Unit if conversion occurs within the following two years. In certain circumstances, the conversion price may be greater than Cdn $0.05 or Cdn $0.10, respectively, if the Company has announced a positive change concerning its resources prior to conversion.
Each Unit will be comprised of one common share (a "Share") of the Company and one-half of one share purchase warrant, with each whole warrant (a "Warrant") exercisable to purchase one additional common share of the Company (a "Warrant Share") at an exercise price of Cdn $0.10 for a period of three years from the date of issuance of the Debentures. In the event that the closing price of the common shares of the Company on the Exchange is equal to or exceeds Cdn $1.00 for a period of 10 consecutive trading days (the "Acceleration Event"), the Warrants will expire on the date which is 90 calendar days after the Company provides notice that the Acceleration Event has occurred.