Atico Mining Corporation Announces US$6.5 Million Unsecured Convertible Debenture Private Placement

NOT FOR DISTRIBUTION TO US NEWS WIRE SERVICES OR FOR DISSEMINATON INTO THE UNITED STATES

VANCOUVER, British Columbia, Dec. 07, 2020 (GLOBE NEWSWIRE) -- Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY | OTC: ATCMF) is pleased to announce that it has entered into a subscription agreement with Dundee Corporation with respect to the issuance of unsecured convertible debentures (the “Debentures”) of the Company for gross proceeds of US$6.5 million (the “Offering”).

The Debentures will mature five years following the closing date with an interest rate of 7% per annum and, subject to certain terms and conditions, will be convertible into up to an aggregate of 11,627,907 common shares of the Company (the “Conversion Shares”) at a conversion price of US$0.559 per Conversion Share (being CDN$0.715 per Conversion Share converted into US dollars using the Bank of Canada daily exchange rate for CDN$ to US$ on December 4, 2020). The conversion price represents (i) a premium of 42% to the 20-day VWAP, and (ii) a premium of 34% to the 10-day VWAP, of the closing price of the common shares on December 4, 2020. The Debentures, and Conversion Shares issuable upon conversion of the Debentures, will be subject to resale restrictions for a period of four months from the date of closing of the Offering.

The Company may, at its option, redeem the Debentures, in whole or in part, at par plus accrued and unpaid interest. The Company must pay a redemption fee equal to 2% of the principal amount if redeemed between 12 months and 2 years after the date of closing of the Offering and equal to 4% of the principal amount if redeemed within 12 months of such date. No redemption fee will be charged to redeem the Debentures after two years of the date of closing of the Offering. In connection with the Debentures, certain subsidiaries of the Company will grant a guarantee in favour of Dundee Corporation.

The proceeds of the Offering will be used for work on the Company’s La Plata project and for general working capital purposes. The closing date for the Offering is expected to be on or about December 11, 2020.

The Offering is subject to customary conditions, including but not limited to, the receipt of all necessary approvals, including the final approval of the TSX Venture Exchange.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will be not be registered under the United States Securities Act of 1933 as amended (the “1933 Act”), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons (as defined in Regulation S under the 1933 Act) absent such registration or an applicable exemption from such registration requirements.