Falco Completes Extension of Maturity of Its Senior Loan

MONTREAL, Nov. 27, 2020 (GLOBE NEWSWIRE) -- Falco Resources Ltd. (TSX.V: FPC) (“Falco” or the “Corporation”) is pleased to announce the successful completion of its previously announced extension to the maturity of the Corporation’s existing senior secured loan (the “Senior Loan”) with Osisko Gold Royalties Ltd (“Osisko”) from December 31, 2020 to December 31, 2022.

Senior Loan Amendment

Under the terms of the extension of the maturity date of the Senior Loan (the “Senior Loan Extension”), the Senior Loan was amended to become convertible after the first anniversary of its execution date into common shares of the Corporation (the “Common Shares”) at a conversion price of $0.55 per share, subject to standard anti-dilution protections. The Senior Loan will continue to bear interest at a rate of 7.0% per annum compounded quarterly. The Corporation did not receive any additional proceeds in connection with the Senior Loan Extension.

In consideration for the Senior Loan Extension, the Corporation also issued to Osisko 10,664,324 warrants of the Corporation (the “Warrants”), each exercisable for one Common Share at an exercise price of $0.69 for a period of 24 months from their date of issuance. The terms of the Warrants also provide for a cashless exercise feature.

The underlying Common Shares issuable upon conversion of the Senior Loan will be subject to a hold period of four months from the closing date of the Senior Loan Extension in accordance with applicable Canadian securities laws. The Warrants (and the underlying Common Shares) will be subject to a hold period of four months from the date of issuance of the Warrants, in accordance with applicable Canadian securities laws.

Silver Stream Amendment

Osisko and Falco have also amended the silver stream agreement entered into on February 27, 2019, as amended on January 31, 2020, in order to postpone by one year certain deadlines granted to Falco to achieve milestones set as conditions precedent to Osisko funding the stream deposit (the “Silver Stream Amendment”).

Related Party Transactions

Immediately prior to closing of the Senior Loan Extension and the Silver Stream Amendment, Osisko had beneficial ownership of, or control and direction over, (i) 41,385,240 Common Shares, representing approximately 18.3% of the issued and outstanding Common Shares, and (ii) 6,052,222 warrants. Immediately following the closing, on a partially-diluted basis assuming the conversion in full of the Senior Loan and the exercise in full of all of Osisko’s warrants, Osisko would have beneficial ownership of, or control and direction over, 90,094,760 Common Shares, representing approximately 32.8% of the Common Shares issued and outstanding.