Battery Mineral to settle $23M (U.S.) debt with shares

Executive Summary

• Battery Mineral Resources Corp. has agreed to settle approximately $23 million in outstanding debt owed to Weston Energy LLC and Weston Energy II LLC by issuing up to 159,153,035 common shares.
• The transaction involves converting unsecured convertible debentures into equity at a price of $0.20 per share, satisfying obligations that represent roughly 92.8% of the company's total convertible debenture debt.
• The deal is classified as a related party transaction under MI 61-101 due to the Weston entities' significant shareholding (approx. 58.37%) but is exempt from formal valuation and minority shareholder approval requirements due to the company's financial difficulty and the transaction's purpose to improve its financial position.

Key Details

• Transaction Structure: Debt-for-equity swap settling up to $23,003,980 (U.S.) in outstanding debt.
• Shares Issued: Up to an aggregate of 159,153,035 common shares.
• Price Per Share: $0.20 USD.
• Counterparties: Weston Energy LLC and Weston Energy II LLC.
• Debt Origin: Unsecured convertible debentures originally issued via private placement between October 2023 and November 2024.
• Debt Coverage: The settlement covers approximately 92.8% of the total outstanding debt under all convertible debentures issued by the company.
• Regulatory Status: Completion is subject to regulatory approvals, including acceptance by the TSX Venture Exchange.
• Shareholder Restrictions: All securities issued are subject to a four-month hold period from the date of issuance under Canadian securities laws.
• Related Party Status: The Weston entities are affiliated entities holding more than 20% of issued shares. Prior to the transaction, they controlled approximately 58.37% of outstanding common shares (107,578,740 shares).
• MI 61-101 Exemptions: The transaction is exempt from formal valuation requirements (as the issuer is not on a specified market) and minority shareholder approval requirements (due to serious financial difficulty and the transaction's intent to improve financial position).
• Strategic Rationale: The board believes the settlement strengthens the balance sheet, enhances financial flexibility, and preserves cash resources for continuing operations and strategic initiatives.

Notable Quotes

• "The company's board of directors and management believe that completing the debt settlement is in the best interests of the company as it will allow the company to preserve its cash resources for continuing operations and strategic initiatives."