Kutcho Copper Eliminates Debt and Expands Partnership with Wheaton Precious Metalse

VancouverKutcho Copper Corp. (TSXV: KC) (OTC: KCCFF) (“Kutcho” or the “Company”) is pleased to announce that it has entered into an Amending Agreement with Wheaton Precious Metals Corp. (“Wheaton”) with respect to the Precious Metals Purchase Agreement dated December 14, 2017as amended (hereinafter the “Original Agreement”).

The Original Agreement, as modified by the Amendment, is referred to as the “PMPA”.

Kutcho Copper President and CEO, Vince Sorace, commented, “The amended arrangement with Wheaton eliminates all of the Company’s outstanding debt, resulting in an unfettered balance sheet available to pursue advanced project development activities. Through this modified arrangement, Wheaton converted his debt into additional equity in the precious metals stream and company stock, demonstrating his belief in the merits of the project and his path to a production decision. This amendment, combined with our November 2022 Positive Feasibility Study for Kutcho High-Grade Copper-Zinc Project, Positions Company to Focus on Key Priorities: Advance Permitting; optimize project economics; define and explore additional mineral resources and evaluate several alternatives to finance the development of the mine. We appreciate Wheaton’s financial and technical support over the past few years and look forward to their involvement in the future.

The Amendment provides for the settlement and termination of the Company’s indebtedness (the Existing Convertible Debenture (the “Convertible Debenture”) and the Loan Agreement (the “Loan Agreement”)), both as amended with Wheaton , totaling approximately CA$38,400,000 in consideration for: (i) the delivery to Wheaton of $7,500,000 ordinary shares in the capital of Kutcho (the “Ordinary Shares”) and (ii) the removal of the Stream Reduction, as defined below, together with certain amendments to the Initial Agreement, as detailed below . Please refer to Kutcho press releases August 10, 2017 and December 15, 2017 with respect to the Initial Agreement and the Convertible Debenture, the November 15, 2019 press release regarding the Loan Agreement and certain amendments to the Convertible Debenture, and the June 30, 2021 press release regarding recent deferrals of interest.

Under the original agreement, precious metals flow was to be reduced by 100% to 66.67% of gold and silver production payable after delivery of 5.6 million ounces of silver and of 51,000 ounces of gold (“flow reduction”). As part of the settlement and termination of the Convertible Debenture and Loan Agreement, the Amendment removes the Stream Reduction and Additional Expansion Payment of up to $20 million which was to be paid by Wheaton in the event of future increases in processing capacity, as provided for in the original agreement. The amount settled under the Convertible Debenture and Loan Agreement, less the value of the common shares issued to Wheaton, will include an additional deposit from Wheaton under the PMPA. Wheaton remains obligated to pay the remaining initial deposit of $58 million (being the remaining balance of the initial deposit amount of $65 million), subject to the terms and conditions of the PMPA, and will also make ongoing cash payments equal to 20% of the applicable silver and gold spot price for each ounce delivered under the PMPA.

Finally, the Amendment provides that, in connection with the settlement and termination of the Convertible Debenture and Loan Agreement, Wheaton will receive $7.5 million of common shares at a deemed price of CDN$0.908 per ordinary share. The issuance of common shares to Wheaton is subject to the receipt of TSX Venture Exchange approval. The parties aim February 18, 2022 as the closing date for the transactions contemplated by the Amendment.

After the closing of the Amendment, assuming that February 8, 2022 Canadian dollar/US dollar exchange rate ($7,500,000 = CA$9,531,750), Wheaton will hold approximately 17,651,368 common shares and the warrants, representing approximately 15.40% of the issued and outstanding common shares of the Company, and 16.13% of the common shares of the Company on a partially diluted basis, assuming Wheaton exercises the Warrants. The exact number of common shares to be issued will be calculated immediately prior to the closing date based on the applicable exchange rate between the Canadian dollar and the US dollar.

Wheaton currently holds 7,153,846 common shares and 1,000,000 common share purchase warrants (the “Warrants”), representing approximately 6.87% of the issued and outstanding common shares of the Company (on a non-diluted basis ) and 25.26% on a partially diluted basis, assuming that Wheaton of 1,000,000 warrants and the conversion of the convertible debenture for the full principal amount, which would result in the issuance of 24,615,384 common shares . Accordingly, Wheaton is considered a “related party” to the Company and the Amendment may be considered a “related party transaction” under Multilateral Instrument 61-101. The amendment and related transactions are exempt from the valuation requirements of NI 61-101 because Kutcho is listed on the TSX Venture Exchange (Section 5.5(b) of NI 61-101) and minority shareholder approval requirements because: (i) the Company is in serious financial difficulty and (ii) the amendment is intended to improve the financial condition of the Company ( paragraph 5.7(e) of MI 61-101). Kutcho’s directors (all of whom are independent of Wheaton) have unanimously determined that (i) and (ii) apply and that the terms of the transaction are reasonable in Kutcho’s circumstances.

The common shares and warrants held by Wheaton are currently held for investment purposes only. Wheaton may from time to time in the future increase or decrease its ownership, control or direction of the common stock or any other securities of the Company, through market transactions, private agreements or otherwise. Wheaton intends to file an early warning statement (the “Early Warning Statement”) in accordance with applicable securities laws in connection with the transactions contemplated herein.


Email: [email protected]

Web: www.kutcho.ca

Caution Regarding Forward-Looking Statements

This press release contains certain statements that may be deemed “forward-looking statements” with respect to the Company within the meaning of applicable securities laws, including statements regarding the Company’s future operating plans, the date of estimated closing of modification operations, mineral resources and mineral reserves, estimated production timing and amount, production costs, capital expenditures, raw material price assumptions, the Company’s ability to obtain successfully completed all regulatory approvals and permits to commence and conduct mining operations, environmental risks and title challenges. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”. , ‘estimates’, ‘projects’ , ‘potential’ and similar expressions, or that events or conditions ‘will’, ‘would’, ‘could’, ‘could’ or ‘should’ occur. Although the Company believes that the expectations expressed in these forward-looking statements are based on reasonable assumptions, these statements are not guarantees of future performance, are subject to risks and uncertainties, and actual results or realities may differ materially. of those forward-looking statements. statements. These material risks and uncertainties include, but are not limited to, the Company’s ability to obtain all required approvals, including the approval of the TSX Venture Exchange and securities regulatory authorities for the Amendment and the share issues described herein, the Company’s ability to raise sufficient capital to fund its obligations under its ownership agreements in the future, to maintain its mining tenures and concessions in good standing, to explore and develop the Kutcho Project or its other projects, to repay its debt and for general working capital purposes; changes in economic or financial market conditions; the inherent risks associated with mineral exploration and mining operations, future prices of copper and other metals, changes in general economic conditions, the accuracy of mineral resource and reserve estimates, the Company’s ability to obtain the necessary permits and consents to explore, drill and develop the Kutcho Project and, if obtained, obtain such permits and consents in a timely manner relative to the Company’s business plans and objectives for the projects; the Company’s general ability to monetize its mineral resources and changes in environmental and other laws or regulations that may affect the Company’s business, compliance with environmental laws and regulations, claims of aboriginal title and rights of consultation and accommodation, dependence on key management personnel and general competition in the mining industry. Forward-looking statements are based on the reasonable beliefs, estimates and opinions of the Company’s management as of the date the statements are made.

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