Western Sierra Resource Corporation Announces Funding, Asset, and Management Consolidation Agreement With Global Hemp Group for Implementation of Beneficial Use Projects in Colorado
STEAMBOAT SPRINGS, Col., Jan. 20, 2021 (GLOBE NEWSWIRE) -- WESTERN SIERRA RESOURCE CORPORATION (“WSRC” or the “Company”) OTC: WSRC announces that a binding Letter of Intent for
funding, asset, and management consolidation has been executed with GLOBAL HEMP GROUP, INC. (CSE: GHG/OTC: GBHPF/FRANKFURT: GHG. Prescient Strategies Group LLC (“PSG”), holder of a majority of the
Company’s Preferred Series A Shares, has signed a binding Letter of Intent wherein it has agreed to transfer its Western Sierra Resource Corporation (“WSRC”) Preferred Series A Shares (“WSRC
Prefs”) to GHG in a private, third party transaction in exchange for funding to advance WSRC’s water and resource projects under the GHG Corporate umbrella; and to retire WSRC’s secured debt
obligations. The resulting acquisition of these WSRC Prefs will effectively give GHG board control of WSRC, and specifically of its strategic water infrastructure assets that will be an integral
part of the Company’s Colorado Hemp-Agro Industrial Zone project as originally announced on September 16, 2020. The parties have agreed to develop the project through Innovative Hemp
Technologies--a wholly owned GHG U.S. subsidiary. The resulting alignment of GHG, WSRC and their respective management teams together under one umbrella will result in a stronger, more
focused, and efficient entity.
As part of the contemplated transaction, GHG is in the process of commissioning updated appraisals on WSRC’s water assets. Documented historical valuations of WSRC’s 4,000-acre feet of water rights and associated infrastructure assets include a 2013 MAI appraisal, 2015 Water Engineer Valuation, and 2017 Water Law Attorney’s Comprehensive Summary of Value, all of which support a value of U.S. $40,000,000 or higher.
Prescient Strategies Group LLC currently holds 19,875,000 of 20,000,000 Series A WSRC Prefs (with Voting Rights of 100 votes per share). On signing of the Definitive Agreement, which is expected to be concluded on or about January 25, 2021, GHG will acquire 11,006,440 unencumbered WSRC Prefs from PSG in exchange for 11,006,440 GHG Preferred B shares (“GHG Prefs”) (the “Initial Issuance”), as more fully outlined below.
An additional 8,868,560 WSRC Prefs have been pledged as collateral to secure US $3,842,269 in debt financing for WSRC. These encumbered WSRC Prefs will also be acquired by GHG upon restructure/repayment of WSRC’s existing debt (the “WSRC Debt”) by way of, but not limited to, the consolidation, refinance, or extension of the existing WSRC Debt (the “WSRC Debt Restructuring”). Further to the WSRC Debt Restructuring, the WSRC Debt will have a maturity of a minimum of three (3) years, with the objective of replacing existing notes and releasing the WSRC Prefs as collateral.