16:46:09 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Wheaton Precious Metals Corp
Symbol WPM
Shares Issued 442,377,830
Close 2017-12-08 C$ 27.01
Market Cap C$ 11,948,625,188
Recent Sedar Documents

Wheaton acquires 6.15 M subscription receipts of Desert

2017-12-11 09:52 ET - News Release

Mr. Patrick Drouin reports

EARLY WARNING REPORT FILED PURSUANT TO NATIONAL INSTRUMENT 62-103

Wheaton Precious Metals Corp. has acquired 6,153,846 subscription receipts of Desert Star Holdings Corp., a wholly owned subsidiary of Desert Star Resources Ltd., at a price of 65 cents per subscription receipt, for total consideration of $4-million, pursuant to a private placement offering of 22,498,807 subscription receipts.

The subscription receipts will automatically convert upon satisfaction of certain escrow release conditions. The escrow release conditions include, but are not limited to: (i) the completion of all conditions precedent to the acquisition by Desert Star of the Kutcho project in northwest British Columbia, Canada, from Capstone Mining Corp., (ii) Desert Star entering into a subordinated secured convertible term debt loan agreement with Wheaton, as lender, in the initial principal amount of $20-million, and (iii) Desert Star and Wheaton entering into a definitive early deposit precious metals purchase agreement, under which Wheaton will, among other things, pay Desert Star, over time, cash consideration totalling $65-million (U.S.) for up to 100 per cent of the payable silver production and up to 100 per cent of the payable gold production from the Kutcho project.

Prior to the completion of the private placement, Wheaton held no securities of Desert Star. Immediately following the private placement, Wheaton acquired 6,153,846 subscription receipts which, upon satisfaction of the escrow release conditions and following a series of transactions, will be automatically converted into units of Desert Star comprising: (i) 6,153,846 common shares of Desert Star, representing approximately 14.8 per cent of Desert Star's common shares currently issued and outstanding on such undiluted basis (assuming conversion of all subscription receipts), and (ii) common share purchase warrants entitling Wheaton to purchase a further 3,076,923 common shares at a price per common share of $1 for a period of 36 months following the date of the closing of the private placement. In the event that the warrants are exercised in full by Wheaton, it will have acquired 9,230,769 common shares in connection with the private placement, representing approximately 20.7 per cent of Desert Star's common shares currently issued and outstanding on such partially diluted basis.

The subscription receipts purchased by Wheaton were purchased and are presently being held only for investment purposes. Wheaton may from time to time in the future increase or decrease its ownership, control or direction over the common shares or other securities of Desert Star, through market transactions, private agreements or otherwise. In the event that the escrow release conditions are not satisfied within the prescribed time frame, the subscription amount will be returned to Wheaton, the subscription receipts will terminate, and no units will be issued.

Upon the satisfaction of the escrow release conditions, Wheaton will hold the convertible note. Under the terms of the convertible note, the principal amount is convertible into common shares at the option of Wheaton at any time and from time to time prior to the maturity of the convertible note and otherwise in accordance with its terms, at a conversion price equal to 81.25 cents of principal amount per common share. Wheaton will have the right, but not the obligation, to acquire approximately 24,615,384 common shares in connection with the exercise of the above-described conversion right. After giving effect to the automatic conversion of the subscription receipts and the exercise of all warrants received by Wheaton in connection therewith, and assuming the conversion of the entire initial principal amount of the convertible note to common shares (with no portion of the principal amount consisting of converted interest), Wheaton would hold, in aggregate, approximately 49 per cent of Desert Star's common shares currently issued and outstanding on such partially diluted basis (approximately 40 per cent on a fully diluted basis).

The details of the Kutcho acquisition, PMPA, convertible note and private placement are disclosed in press releases of Desert Star dated June 15, 2017, Aug. 10, 2017, Oct. 31, 2017, Nov. 2, 2017, and Dec. 8, 2017, copies of which have been electronically filed by Desert Star with applicable Canadian securities regulators and are available for viewing on the SEDAR profile of Desert Star.

We seek Safe Harbor.

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