The Board of Directors recommends that shareholders approve management's proposals on the following:
Issuance of Shares as Payment for Certain Management and Consulting Fees in Lieu of Cash
In order to preserve cash, the Company is proposing to issue shares in lieu of cash in certain instances. Shareholders will be asked to pass an ordinary resolution giving the Board of Directors the ability, at its sole discretion, to approve the issuance of the Company's common shares as payment for certain management and consulting fees in lieu of cash, if it so chooses. Under this proposal, the maximum aggregate amount of shares that could be issued would be equivalent to C$250,000.
Conversion of the US$2 million Loan from First Quantum Minerals into Zincore Shares
As originally announced March 22, 2013, First Quantum has extended a US$2 million loan to Zincore for working capital purposes. The principal amount of the loan plus accrued and unpaid interest (the "Loan Amount") may be repaid in cash, or may be converted at any time into one of three options as selected by First Quantum: a credit against First Quantum's obligations to incur exploration expenses at the two companies' Dolores joint venture project, a credit against First Quantum's earn-in obligations at any new copper project with Zincore, or be converted into common shares of Zincore, subject to shareholder and Toronto Stock Exchange (the "TSX") approval.
Any conversion of Loan Amount into Zincore shares would be at the greater of the volume weighted average trading price of the Company's shares on the TSX for the five days prior to the date of conversion, or US$0.08/share. As the loan's maturity date is before the next anticipated Company meeting, shareholders will be asked to pass an ordinary resolution authorizing the issuance of up to 27,460,963 common shares issuable upon conversion of the Loan Amount (and assuming an effective interest rate of 9.5%) should First Quantum elect this repayment option. As the Company does not know if its share price will be above US$0.08 at the time of conversion and does not know what the effective interest rate will be, this authorization and share amount may be reduced accordingly. The number of common shares referred to above is also calculated prior to the share consolidation discussed below. At this time, Zincore is not aware of any specific intention on First Quantum's part to convert the loan into Zincore shares.
First Quantum currently holds 49,888,245 shares of Zincore, or 23.7% of the Company's issued and outstanding stock.
For more details on the First Quantum loan, please see our news release dated March 22nd, or click here: http://zincore.mwnewsroom.com/press-releases/zincore-arranges-loan-with-first-quantum-minerals-tsx-znc-201303220861825001
Given the very difficult environment for junior resource companies to finance, management believes it is in the best interests of current shareholders to have the Company's capital structure made more attractive to future investors through a share consolidation, so that the Company will have the best chance to raise new funds and realize the value from its projects. Accordingly, shareholders will be asked to pass an ordinary resolution approving the consolidation of all of the issued and outstanding common shares of the Company on the basis of on, or up to, six old common shares for one new common share.
Most Popular Stories
- Slow Week Ahead of December FOMC Meeting
- Hispanics Seek to Grow School Board Members
- 'Knockout Game': Myth or Menace?
- U.S. Companies Eager for Iranian Business
- Questions Remain in Jenni Rivera's Death
- Bitcoin Used to Buy Tesla Car
- Entrepreneurs' Next Creation May Be New Laws
- Banks Fret as Volcker Vote Approaches
- Obama Delivers Speech at Mandela Memorial: Transcript
- Paul Walker Fans Pay Respects