Endomines Finland Plc commences a directed offering and publishes the terms of the offering

Endomines Finland Plc, Press release 28 November 2022, kello 11.00 CET.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SINGAPORE, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Endomines AB (publ) ("Endomines AB") and Endomines AB's subsidiary Endomines Finland Plc ("Endomines Finland", jointly with Endomines AB, "Endomines") on 24 November 2022 announced that Endomines Finland is planning an offering of shares (the “Offering”) to ramp up exploration at the Karelian Gold Line.

Based on an authorisation given by Endomines Finland's shareholder Endomines AB on 17 October 2022, Endomines Finland's Board of Directors on 28 November 2022 passed a resolution on an Offering where Endomines Finland offers, in deviation from the pre-emptive right of shareholders, up to 2,600,000 new shares to the public in Finland and Sweden (the "New Shares"). The Board of Directors of Endomines Finland may, in the event of an oversubscription, increase the number of New Shares offered in the Offering by a maximum of 1,000,000 New Shares (the "Upsize Option"). If the Upsize Option is used in full, the number of New Shares offered may amount to up to 3,600,000 shares in aggregate. The subscription period for Offering will commence on 30 November 2022 at 9:30.

The Offering in brief:

• The Offering comprises (i) a public offering of New Shares to private individuals and legal entities in Finland and Sweden (the "Public Offering"); (ii) a personnel offering of New Shares to permanent employees of Endomines Finland as well as members of Endomines Finland's Management and Board of Directors (the “Personnel Offering”); and (iii) an offering of New Shares to institutional investors in the European Economic Area and in the United Kingdom (the "Institutional Offering").
• The subscription price of each New Share in the Public and Institutional Offering is EUR 5.00. The subscription price of each New Share is approximately 10 per cent lower in the Personnel Offering than in the Institutional and Public Offering, i.e., EUR 4.50 per New Share.
• Endomines Finland aims to raise approximately EUR 13 million in gross proceeds from the Offering based on the number of New Shares offered (2,600,000 New Shares without the Upsize Option). Endomines Finland aims to use the proceeds from the Offering for the implementation of Endomines' strategy and especially for exploration along the Karelian Gold Line, for strengthening their capital structure and for general business needs.
• If the Offering is oversubscribed, the Board of Directors of Endomines Finland may increase the number of New Shares by the Upsize Option, i.e. a maximum of 1,000,000 New Shares. If the Upsize Option is also subscribed for in full, a maximum total of 3,600,000 New Shares can be issued in the Offering.
• In the Public and Personnel Offering, the subscription price shall be paid in cash. In the Institutional Offering, the subscription price shall be paid either in cash or by way of setting off one or several of the convertible loans of Endomines Finland, including accumulated interest and potentially unpaid loan premiums.
• Endomines Finland has received subscription commitments from Joensuun Kauppa ja Kone Oy, Mariatorp Oy, Wipunen varainhallinta Oy, Sijoitusrahasto Zenito Silver and Gold as well as from some other investors of EUR 12.2 million in total to subscribe for New Shares in Endomines Finland, subject to that the subscription price of the New Shares is not more than Endomines AB’s share price at the end of the trading day on Nasdaq Helsinki Ltd’s (“Nasdaq Helsinki”) official list prior to the resolution on the Offering.
• The New Shares issued in the Offering (excluding the Upsize Option) amount to approximately 38.9 per cent of all the shares in Endomines Finland (including the shares to be issued as Merger Consideration (as defined below)) and the votes attached thereto before the Offering and around 28.0 per cent after the Offering (provided that all New Shares are subscribed for and the Upsize Option is not exercised), and 38.8 per cent of the shares the votes attached thereto provided that the Upsize Option is exercised in full.
• In case of over-subscription, the Board of Directors of Endomines Finland has the right to, before other subscribers, allocate New Shares to (i) Endomines AB’s shareholders who have made a subscription, and who on 28 November 2022 have been entered in the Endomines AB’s shareholders’ register maintained by Euroclear Sweden AB, in proportion to their current holding, and thereafter (ii) to subscribers who have issued a subscription commitment.
• The subscription period for the Public, Personnel and Institutional Offering will commences on 30 November 2022 at 9:30 and ends on 9 December 2022 at 16:30.
• Trading in Endomines Finland's shares is expected to commence on the official list of Nasdaq Helsinki on or about 20 December 2022 under the share trading code PAMPALO.

Reasons for the Offering

During 2022, Endomines has renewed its business strategy, focusing on exploration along the Karelian Gold Line. Measures required for the implementation of the strategy include extensive exploration drilling in the area, which requires Endomines to make investments and causes costs. The purpose of the Offering is to enable extensive exploration drilling along the Karelian Gold Line and to create conditions for future growth and the implementation of Endomines' strategy. Additionally, the purpose of the Offering is to expand Endomines' ownership structure, increase Endomines' visibility among investors and to strengthen Endomines' capital structure thus enabling a more diverse use of debt financing solutions in the future.  

Re-domiciliation to Finland

On 18 August 2022, Endomines Finland signed, together with its Swedish parent company Endomines AB, a merger plan proposing that Endomines AB merges into Endomines Finland (the ”Merger”) and simultaneously the group shall change its domicile to Finland. The re-domiciliation is carried out as a cross-border downstream merger. The Merger is planned to be implemented on or about 16 December 2022. According to the assessment of Endomines AB, re-domiciliation to Finland will serve Endomines better, taking into consideration that the current national regulatory frameworks do not fully accommodate Endomines' operations and its shareholders. The re-domiciliation is expected to decrease administrative complexity, enhance efficiency, and reduce administrative costs. The business operations, assets, liabilities, and employees of Endomines' remain unaffected by the re-domiciliation. As merger consideration, Endomines AB’s shareholders will receive one new share in Endomines Finland per each share they hold in Endomines AB. In the Merger, Endomines Finland will issue 6 679 959 shares in total as merger consideration (”Merger Consideration”).

The application for the admission to trading on the official list of Nasdaq Helsinki of Endomines Finland’s shares will be done in connection with the Merger and the Offering. The trading in Endomines Finland's shares is expected to start on or about 20 December 2022. Endomines AB has resolved on applying for de-listing of its shares on Nasdaq Stockholm in connection with the contemplated implementation of the Merger, and due to technical difficulties with admitting Finnish shares to trading on Nasdaq Stockholm, Endomines Finland's shares will not be admitted to trading on Nasdaq Stockholm.

Completion of the Offering is conditional upon completion and registration of the Merger.

Publication of the prospectus

Endomines Finland has drawn up a prospectus regarding the Offering (the "Prospectus"), which the Finnish Financial Supervisory Authority is expected to approve on or about 28 November 2022. The Prospectus will be available in the Finnish and English language on Endomines website on or about 28 November 2022 at ipo.endomines.com. In addition, the Prospectus will be available in the Finnish and English language on the lead manager's website at www.alexander.fi/endomines on or about 28 November 2022.

Important dates

• The subscription period for the Offering commences on 30 November 2022 at 9:30.
• The subscription period for the Offering ends on or about 9 December 2022 at 16:30.
• Announcement of the final results of the Institutional Offering and Public Offering on or about 13 December 2022.
• Announcement of the final results of the Personnel Offering on or about 16 December 2022
• The Merger will be entered in the Finnish Trade Register on or about 16 December 2022.
• The New Shares offered in the Offering are registered in the book-entry accounts of the investors on or about 19 December 2022.
• Trading in the New Shares and shares given as Merger Consideration commences on the official list of the Helsinki Stock Exchange on or about 20 December 2022.

Advisors

Aktia Alexander Corporate Finance Ltd (”ACF”) is acting as the lead manager and as the subscription venue in connection to the Offering. Borenius Attorneys and Advokatfirman Schjødt act as legal advisors to Endomines. Miltton Ltd is acting as Endomines communications adviser.

For further information, please contact:

Kari Vyhtinen, CEO, kari.vyhtinen@endomines.com, +358 40 585 0050

About Endomines

Endomines is a mining and exploration company with its primary focus on gold. Endomines is engaged in mining operations at the Pampalo mine in Ilomantsi, and in exploration activities along the Karelian Gold Line in Eastern Finland. Endomines also owns rights to several gold deposits in Idaho and Montana, US, where Endomines aims to continue the development work through partnership agreements.

IMPORTANT INFORMATION

Neither this release nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or Singapore or any other jurisdiction in which publication or distribution would be unlawful. The information contained herein does not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States. Endomines does not intend to register any portion of the offering in the United States under the U.S. Securities Act of 1933, as amended, or to offer securities to the public in the United States.

The issue, exercise and/or sale of securities are subject to specific legal or regulatory restrictions in certain jurisdictions. Endomines or ACF assume no responsibility in the event there is a violation by any person of such restrictions.

The information contained herein shall not constitute an offer to sell or a solicitation of an offer to purchase or subscribe, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the prospectus that Endomines Finland will publish.

Endomines has not authorized any offer to the public of securities in the United Kingdom or in any Member State of the European Economic Area other than Finland and Sweden. With respect to the United Kingdom and each Member State of the European Economic Area other than Finland and Sweden and which applies the Prospectus Regulation (each, a “Relevant Member State“), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity, which fulfils the requirements of a qualified investor as defined in the Prospectus Regulation; or (b) in any other circumstances falling within Article 1(4) of the Prospectus Regulation. For the purposes of this paragraph, the expression an “offer of securities to the public” means a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129 of the European Parliament and of the Council, as amended.

This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order“) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as “Relevant Persons“). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

Full terms, conditions and instructions for the contemplated offering will be included in the prospectus that will be prepared by Endomines Finland in connection with the contemplated offering. The Finnish prospectus and its unofficial English translation will be published on the website of Endomines at endomines.com.

An investor is advised to read the prospectus before making an investment decision to fully understand the risks and rewards associated with the investment. The approval by the Finnish Financial Supervisory Authority of the prospectus shall not be considered as an endorsement of the securities offered.

FORWARD-LOOKING STATEMENTS

Certain statements in this release are “forward-looking statements.” Forward-looking statements include statements concerning plans, assumptions, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, Endomines' competitive strengths and weaknesses, plans or goals relating to financial position, future operations and development, its business strategy and the anticipated trends in the industry and the political and legal environment in which it operates and other information that is not historical information. In some instances, they can be identified by the use of forward-looking terminology, including the terms “believes,” “intends,” “may,” “will” or “should” or, in each case, their negative or variations on comparable terminology.

Forward-looking statements in this release are based on assumptions. Forward-looking statements involve inherent risks, uncertainties and assumptions, both general and specific, and the risk exists that the predictions, forecasts, projections, plans and other forward-looking statements will not be achieved. Given these risks, uncertainties and assumptions, you are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements contained herein speak only as at the date of this release. Save as required by law, Endomines does not intend to, and does not assume any obligation to, update or correct any forward-looking statement contained in this release.

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