Scorpio Gold – Closing of Principal Convertible Loans


VANCOUVER, British Columbia, Aug. 18, 2022 (GLOBE NEWSWIRE) — Scorpio Gold Corporation (“Scorpio Gold“or the”Company”) (TSX-V: SGN) announces that following its press release dated May 30, 2022, it has closed the two convertible loan agreements dated May 24, 2022, as amended on August 4, 2022 (the “Convertible loan agreements”), with Ianco Holdings Ltd. and Matco Holdings Ltd. (collectively, the “LendersLoans”). To date, the lenders have advanced a total of US$2,350,000 to the company, which has been incorporated into the loans. The loans are subject to final approval by the TSX Venture Exchange (the “Swap”). The remaining $100,000 that may be borrowed by the Company under the loans is subject to further stock exchange approval. The Company intends to use the proceeds of the loans to advance its Goldwedge property and for general working capital purposes.

Convertible Loan Terms

Pursuant to the terms of the Convertible Loan Agreements, the Lenders have agreed to advance the Loans to the Company by drawings until the maturity date of December 31, 2022 (the “Due date”), provided that the principal amount of each Loan advanced does not exceed in the aggregate US$1,225,000. The outstanding principal of the Loans bears interest at the rate of 123/8% per year, monthly capitalization. For each drawdown under the Loans, the Company will pay the applicable lender a facility fee of US$3,250.

The outstanding principal amount of each loan, less any credit charges payable, is convertible, at the option of the relevant lender, into ordinary shares in the capital of the Company (each, a “Ordinary share”) at a conversion price of US$0.06 per common share, subject to adjustment, from the closing date until the earlier of: (i) the expiration date, and (ii ) the date on which all of the outstanding principal amount of the applicable loan has been repaid. A total of 38,733,333 common shares are issuable upon conversion of the outstanding loan principal, subject to adjustment. Interest accrued on the loans is not convertible into common shares.

The Lenders have agreed that they will not convert the outstanding principal amount of the Loans into Common Shares if the conversion of such principal amount results in either Lender owning or controlling, directly or indirectly, more 20% of the total issued and outstanding common shares Shares on a non-diluted basis.

The Company has agreed that so long as any indebtedness remains outstanding under the Convertible Loan Agreements, it will not purchase fixed assets with an aggregate value in excess of US$100,000 without the consent of the lenders, such consent not to be unreasonably refused.

The loans are also guaranteed in favor of the lenders on a past bet basis by present and subsequently acquired personal property of the Company and each of the following Company subsidiaries: Scorpio Gold (US) Corporation, Mineral Ridge Gold, LLC, Goldwedge, LLC and Pinon LLC (collectively, the “Subsidiaries”), as well as a pledge on each of the outstanding shares and shares of the Subsidiaries. The guarantees for the Loans will be provided by each of the Subsidiaries. The Company will provide the lenders with security agreements, pledge agreements and guarantees with respect to the aforementioned securities.

The Loans and Common Shares issuable upon conversion of Loan principal are subject to a four-month hold period which commenced May 24, 2022 and will expire September 25, 2022, in accordance with applicable securities laws and stock market policies.

For further details regarding the Loans, see the Company’s press release dated May 30, 2022.



Chris Zerg
President and CEO

Tel: (775) 753-4778
Email: [email protected]


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding the Company. By their nature, forward-looking statements are subject to a variety of factors that could cause actual results to differ materially from those suggested by the forward-looking statements. In addition, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties, including, but not limited to, the Company’s ability to obtain final stock exchange approval for loans. . There is a significant risk that forward-looking statements will not prove to be accurate, that management’s assumptions may not be correct, and that actual results may differ materially from such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Generally, forward-looking statements can be identified by the use of terms such as “anticipate”, “will”, “expect”, “may”, “continue”, “could”, “estimate”, “expect”. , “plan”, “potential” and similar expressions. Forward-looking statements contained in this press release may include, but are not limited to, the final approval of the exchange of the Loans and the intended use of funds for the Loans. These forward-looking statements are based on a number of assumptions which may prove to be incorrect.

The forward-looking statements contained in this press release are made as of the date hereof or as of the dates specifically referenced in this press release, as the case may be. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements contained or incorporated in this press release. All forward-looking statements contained in this press release are expressly qualified by this cautionary statement.


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