The Emerging Market Gold Fund (EMGF) intends to buy US$5 million worth of Greenstone Resources’ (TSE) convertible preferred shares and will be granted warrants to buy US$5 million of that company’s common shares.
Greenstone’s newly formed convertible preferred shares will have a par value of US$5 per share and a coupon of 6% per annum. Interest will be paid semi-annually.
The shares will be convertible into common shares any time between the second and fifth anniversary dates of the initial investment. The conversion rate will be US$3 per common share on the second anniversary date, escalating by 10% per year.
Alternatively, and subject to agreements with third parties, the investment can be converted into interests in the San Andres gold project in Honduras or La Libertad gold project in Nicaragua.
The warrants can be exercised any time between the initial investment’s second and fifth anniversary. The exercise price will be US$3 per share on the second anniversary, escalating by 12.5% per year.
Greenstone will use the proceeds to explore, develop and complete feasibility studies on San Andres and La Libertad.
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