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

Endomines AB (publ), Stock Exchange Release 25 May 2022 at 18:00 CEST

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 600,000 (corresponding to SEK 6,288,720¹) to LDA Capital Limited ("LDA") (the “Directed Issue”), providing total issue proceeds of EUR 600,000.

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. The convertible bonds have previously been issued in the amount of SEK 2 million in total, which LDA has converted in its entirety into the company's shares. Endomines has committed to issue and LDA has committed to subscribe and pay a loan totaling EUR 4 million. The Board of Directors has established that now is deemed to be an appropriate time to issue the convertibles for working capital funding. 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 104,8121) 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 600,000. In accordance with the Agreement, Endomines shall pay a fee of in total EUR 180,000 to LDA for its undertaking. A fee of EUR 90,000 has been paid before and EUR 50,000 is now being paid, therefore the net return on the Directed issue is EUR 550,000.

The Directed Issue is expected to be registered with the Swedish Companies Registration Office on or around 6 June 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 6,288,720, to SEK 533,685,476, and the number of shares and votes will increase with 3,144,390, to 266,842,738 shares and votes. This corresponds to a dilution effect of approximately 1.2 percent of the share capital and votes calculated based on full conversion.

Contact person

Mikko Sopanen, CFO, mikko.sopanen@endomines.com, +358 50 434 7439

This information was submitted for publication through the contact person set out above at 18:00 CEST on 25 May 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).


¹ Based on the Swedish central bank's (Sw. Sveriges Riksbank) official EUR/SEK rate of SEK 10.4812 on 24 May 2022.