BlackRock Metals Inc. Announces Strategic Process Pursuant to a Court-Supervised Restructuring Proceeding

MONTREAL, Dec. 23, 2021 /CNW Telbec/ - BlackRock Metals Inc. ("BRM" or the "Company") announced today that it has obtained an initial order (the "Initial Order") from the Superior Court of Québec (Commercial Division) (the "Court") and commenced proceedings pursuant to the Companies' Creditors Arrangement Act (the "CCAA" and the "CCAA Proceedings"). The Initial Order provides for a stay of proceedings in respect of BRM and its subsidiaries and authorizes BRM to continue its business in the normal course during the CCAA Proceedings. 

In connection with the CCAA Proceedings, BRM announced that it has entered into an agreement of purchase and sale ("Purchase Agreement") with its principal secured creditors pursuant to a certain Bridge Credit Agreement dated January 18, 2019 in the approximate amount of C$90 million (the "Bridge Credit Agreement"), being OMF Fund II H Ltd. ("Orion") and Investissement Québec ("IQ") (and in that capacity, collectively the "Secured Lenders"), pursuant to which (i) the Secured Lenders would become the owners of BRM through a credit bid of the secured debt held by the Secured Lenders under the Bridge Credit Agreement for 100% of the equity of BRM and (ii) certain liabilities and assets of BRM would not be assumed by the Company going-forward.  Subject to the Court's approval, the Purchase Agreement will serve as the "stalking horse" bid (the "Stalking Horse Bid") in a sale and investment solicitation process (the "Strategic Process") supervised by the Court and Deloitte Restructuring Inc., who has been appointed as the monitor (the "Monitor") in the CCAA Proceedings. The Stalking Horse Bid sets the floor, or minimum bid, for the Strategic Process, which will be conducted by the Monitor under the Court's supervision, and confirms that, subject to approval by the Court, a transaction can be implemented at the end of the Strategic Process that will enhance the possibility for BRM securing an approximately US$1.1 billion construction finance facility (the "Construction Finance Facility') needed to construct and complete BRM's planned multi-metallic ferroalloy project in Quebec targeting the production of vanadium, high purity pig iron and titanium products and become North America's speciality metals developer.

BRM has been in discussions with IQ and Orion regarding their potential participation in the Construction Financing Facility as well as the options available to BRM to deal with the debt due under the Bridge Credit Agreement, which matured on December 1, 2021. In those discussions, the Secured Lenders advised that they would not enforce their security over the Company' assets under the Bridge Credit Agreement, provided that the Company take steps to initiate the CCAA Proceedings and commence the Strategic Process, with the Purchase Agreement serving as the Stalking Horse Bid. Under these circumstances, the Company and its board of directors determined, after consultation with professional advisors and a special committee created by the board of directors, that it was necessary at this time and under these circumstances to commence the CCAA Proceedings and advance the Stalking Horse Bid and the Strategic Process.

During the course of the CCAA Proceedings, BRM will continue to operate in the ordinary course of business and will continue to develop the Construction Financing Facility. In connection with the CCAA Proceedings, Orion and IQ have agreed to make additional funding available to BRM under an amendment to the existing Bridge Credit Agreement, if necessary, to ensure the Strategic Process is fully funded and completed.

BRM intends to continue to pay all of its suppliers and employees for goods and services rendered during the CCAA Proceedings. 

Materials publicly filed in the CCAA Proceedings, including the Initial Order, and additional information with respect to the Strategic Process and the Bid, will be made available on the Monitor's website at  https://www.insolvencies.deloitte.ca/blackrockmetals.

A comeback hearing in respect of the relief granted pursuant to the Initial Order has been scheduled for January 7, 2022. 

About BlackRock Metals Inc.

Established in 2008, BlackRock Metals Inc. is a privately-owned Canadian company developing a fully integrated, environmentally enhanced, metals and materials manufacturing business from its wholly owned, world-class vanadium and titanium bearing magnetite ("VTM") deposit in Quebec, Canada. The Company intends to produce High Purity Pig Iron, Ferrovanadium and Titanium Slag in an integrated operation. The BlackRock Project includes what will be the first VTM mine in North America and is designed to utilize green hydrogen at the metallurgical plant. These critical minerals will be transformed in Quebec into green products used by industry to produce and strengthen steel and aluminum alloys enhancing the reduction of global GHG emissions.  

Forward-Looking Statements

This press release may include forward-looking statements, which reflects the Company's current expectations regarding future events. Forward-looking statements include, but are not limited to, statements regarding the development and implementation of the Strategic Process and Stalking Horse Bid and its potential impact and outcomes; the process for developing the Strategic Process and seeking Court approval thereof; the ability to identify and implement any sale or restructuring transaction in connection with the Strategic Process and the CCAA Proceedings; the Company's intended actions during the CCAA Proceedings; and the effect of the CCAA Proceedings. Such statements are based on current expectations of the Company's management and inherently involve numerous risks and uncertainties, known and unknown, and there can be no assurance as to the outcome of the Strategic Process, the Stalking Horse Bid and the CCAA Proceedings.  In particular and without limitation, there can be no assurances as to: the ability of the Company to obtain all necessary approvals in order to complete any sale or restructuring transaction identified in connection with the Strategic Process and the CCAA Proceedings; the stay of proceedings having the effect contemplated by the Company in providing it with additional time to pursue the Strategic Process; the ability of the Company to operate in the ordinary course during the CCAA Proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the ability of the Company to continue as a going concern; the Company's future liquidity position, and access to capital, to fund ongoing operations and obligations; the ability of the Company to stabilize its business and financial condition; the ability of the Company to implement and successfully achieve its business priorities; the ability of the Company to comply with its contractual obligations, including, without limitation, its obligations under debt arrangements; the ability of the Company to generate sufficient cash flow from operations; the impact of competition; the ability of the Company to obtain and retain qualified staff, equipment and services in a timely and efficient manner (including in light of the Company's restructuring efforts); and the ability of the Company to retain members of the senior management team, including but not limited to, the officers of the Company.

SOURCE BlackRock Metals Inc.

Media Contact: Pierre Cossette, Vice President, Corporate Affairs, BlackRock Metals, [email protected]