Carcetti Announces Issuance of Convertible Debentures in the Principal Amount of C$2,500,000 and 5,000,000 Common Shares

Executive Summary

• Carcetti Capital Corp. will raise C$2.5 million through the issuance of non‑interest bearing, unsecured convertible debentures to two related parties (Jonathan Awde and Robert Quartermain).
• Concurrently, the company will issue 5 million common shares at C$2.00 per share as advisory consideration for its acquisition of Hemlo Gold Mine, later to be consolidated into 3.33 million post‑amalgamation HMC Shares.
• Proceeds from the debentures are earmarked for costs associated with closing the Hemlo acquisition; both the debentures and advisor shares are subject to a four‑month hold period pending corporate and TSXV approvals.

Key Details

• Convertible Debentures:
• Total amount: C$2,500,000 (C$1,250,000 each to Awde and Quartermain).
• Term: 5 years; non‑interest bearing, unsecured.
• Conversion right: At holder’s election, any time before maturity, into common shares at C$2.00 per share (adjustable to C$3.00 per HMC Share after consolidation).

• No finder’s fee or commission payable.

• Advisor Shares:

• Quantity: 5,000,000 common shares (“Advisor Shares”).
• Consideration: Deemed price of C$2.00 per share for an aggregate value of C$10 million as payment for advisory services related to reclamation and closure obligations.

• Post‑amalgamation consolidation: Advisor Shares will be merged into 3,333,333 HMC Shares on a post‑consolidation basis (2/3 conversion ratio).

• Related‑Party Transaction:

• Both debenture holders are senior executives (Executive Chair and Lead Director), qualifying the issuance as a related‑party transaction under MI 61‑101.

• Company will rely on specified markets exemption and fair‑market‑value exemption to avoid minority shareholder approval requirements.

• Hold Period & Approvals:

• Advisor Shares, Convertible Debentures, and shares issuable upon conversion are subject to a four‑month plus one day hold period under Canadian securities law.

• Issuances require corporate board approval and TSX Venture Exchange (TSXV) consent.

• Amalgamation & Consolidation:

• Carcetti plans to amalgamate with its wholly‑owned subsidiary, resulting in a share consolidation of two‑thirds (2/3) per pre‑consolidation share into new “HMC Shares” and a name change to Hemlo Mining Corp.

• Upon completion, HMC Shares will no longer be subject to the hold period.

• Use of Proceeds:

• Convertible Debenture proceeds will fund costs and expenses directly related to closing the Hemlo acquisition transaction.

Notable Quotes

(No direct quotes were provided in the release.)