Gamma settles debt, insiders exercise 5.5M warrants

Executive Summary

• Gamma Resources Ltd. has entered into a definitive agreement to fully settle outstanding convertible promissory notes with noteholders, including Mercer Street Global Opportunity Fund LLC and Cavalry Fund I LP, through a combination of cash and equity issuance.
• The transaction involves the issuance of 1,831,500 common shares and 1,831,500 warrants to noteholders, alongside a cash payment of approximately $624,000, aimed at strengthening the balance sheet and simplifying the capital structure.
• Concurrently, 5.5 million existing warrants are being exercised by management and other holders, generating $825,000 in aggregate gross proceeds, which further aligns management with shareholders.

Key Details

• Debt Settlement Structure: The remaining balance of outstanding convertible promissory notes is settled via a mix of cash and equity.
• Equity Issuance to Noteholders: Gamma will issue 1,831,500 common shares and 1,831,500 warrants to the noteholders as part of the settlement.
• Warrant Terms: The warrants issued to noteholders are exercisable at $0.15 per share for a period of 36 months.
• Cash Payment: A cash payment of $623,926.34 is required, payable within 30 days following TSX Venture Exchange approval.
• Warrant Exercises: A total of 5.5 million existing warrants are exercised at $0.15 per warrant.
• Proceeds from Warrant Exercises: The exercise of warrants results in aggregate gross proceeds of $825,000 to the company.
• Warrant Exercise Participants: Three million warrants are exercised by management, with the balance exercised by other holders.
• Ownership Cap: The agreement includes provisions ensuring that the noteholders' ownership does not exceed 9.99% of the company's outstanding shares.
• Regulatory Approval: The shares-for-debt transaction remains subject to approval by the TSX Venture Exchange.

Notable Quotes

• "This agreement represents a meaningful step forward for Gamma. By resolving our legacy debt obligations and strengthening our capital structure, we are better positioned to focus on advancing our U.S. uranium projects and executing on our growth strategy. The participation of both our noteholders and insiders through warrant exercises reflects strong alignment and confidence in the company's future." — Gabriel Alonso-Mendoza, Chief Executive Officer