Endomines resolves on a directed issue of convertibles to LDA Capital Limited

Endomines resolves on a directed issue of convertibles to LDA Capital Limited

Endomines AB (publ), Stock Exchange Release 4 January 2022 at 9:50 CET

The Board of Directors of Endomines AB (publ) ("Endomines" or the "Company") has, based on the authorisation granted by the Annual General Meeting on 10 June 2021, resolved on a directed issue of convertibles with a total nominal amount of EUR 2,000,000 (corresponding to SEK 20,453,8001) to LDA Capital Limited ("LDA") (the “Directed Issue”), providing total issue proceeds of EUR 2,000,000.

The Directed Issue is carried out as part of the financing package which Endomines has entered into with LDA, which was communicated through a press release on 8 May 2021. The financing package comprises, inter alia, a convertible notes facility agreement (the “Agreement”). In accordance with the Agreement, the Company shall issue convertibles to LDA with a total maximum nominal amount in SEK corresponding to EUR 6 million in three tranches of an amount in SEK corresponding to EUR 2 million each. Endomines has undertaken to utilize, and LDA has undertaken to subscribe and pay for, the first two tranches, and thus issue as well as subscribe and pay for convertibles with an amount in SEK corresponding to a total of EUR 4 million within a period of twelve months after the date of the financing package, whereas the third tranche is optional for the Company to utilize. The Board of Directors has established that now is deemed to be an appropriate time to issue the convertibles in light of amongst other the Company’s need to fund the ramp-up at the projects at the Friday mine in the US and the Pampalo mine in Finland. The Board of Directors has evaluated various financing options and deems that the Directed Issue to LDA on market terms in accordance with the Agreement is the best option at this time for the Company and its shareholders compared to other possible financing options. In light of the relatively limited size of the issue amount, that the Company will get quick access to capital, subscription levels in previous rights issues and after consultation with major shareholders in the Company, the Board of Directors does not deem a rights issue to be an appropriate option.

Each convertible has a nominal amount of EUR 10,000 (corresponding to SEK 102,2691) and are issued at a subscription price per convertible of 100 percent of the nominal amount. In accordance with the Agreement, the conversion price shall correspond to 85 percent of the daily volume weighted average price for the Company’s share on Nasdaq Stockholm and Nasdaq Helsinki during the 15 trading days preceding the day for the demand for conversion, which according to the Board of Directors' assessment is in line with the market value with a customary discount. As long as the Company is subject to Swedish law, the conversion price may not be lower than the quota value of the share. The convertibles accrue no interest and the maturity date of the loan is 18 months from the date of registration at the Swedish Companies Registration Office. The convertibles may be converted into new shares in the Company during the period commencing on the date of registration at the Swedish Companies Registration Office up to and including the maturity date. If the convertibles have not been converted prior to the maturity date, the Company have the right to either (i) redeem in cash the outstanding amount under the convertibles on the maturity date at a price corresponding to 115 percent of the outstanding amount or (ii) convert all outstanding convertibles on the maturity date.

The total issue proceeds from the Directed Issue amounts to EUR 2,000,000. In accordance with the Agreement, Endomines shall pay a fee of in total EUR 180,000 to LDA for its undertaking. Payment of the fee shall be made in two instalments of EUR 90,000 each in connection with the first two tranches of issues of convertibles. Thus, the net proceeds from the Directed Issue amount to EUR 1,910,000.

The Directed Issue is expected to be registered with the Swedish Companies Registration Office on or around 12 January 2022 Following the registration of the Directed Issue, and upon full conversion of the loan and based on the assumption that the conversion price is set to the lowest possible conversion price (the quota value of SEK 2), the share capital will increase with SEK 20,453,800, to SEK 472,041,692, and the number of shares and votes will increase with 10,226,900, to 236,020,846 shares and votes. This corresponds to a dilution effect of approximately 4.5 percent of the share capital and votes calculated based on full conversion.

Contact person

Seppo Tuovinen, Interim CEO, seppo.tuovinen@endomines.com, +358 50 576 0143

This information was submitted for publication through the contact person set out above at 9:50 CET on 4 January 2022.

About Endomines

Endomines is a mining and exploration company with its primary focus on gold. The Company explores for gold along the Karelian Gold Line in Eastern Finland and develops mining operations in Idaho, USA and Finland. Endomines aims to improve its long-term growth prospects by increasing its exploration activities and through acquisitions. Endomines aims to acquire deposits that are situated in stable jurisdictions and can be brought to production rapidly with limited investments.

The shares trade on Nasdaq Stockholm (ENDO) and Nasdaq Helsinki (ENDOM).