UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 1.01. Entry into a Material Definitive Agreement.
On March 9, 2023, Hycroft Mining Holding Corporation (the “Company”) entered into a letter agreement (the “Waiver and Amendment”), by and between the Company, Sprott Private Resource Lending II (Collector), LP (the “Lender”) and Sprott Private Resource Lending II (Co) Inc. (“SPRL II” and together with the Lender, the “Sprott Parties”).
As previously disclosed, the Company and the Lender are parties to that certain Amended and Restated Credit Agreement, dated as of May 29, 2020 (the “Credit Agreement”). Pursuant to the terms of the Credit Agreement, the Company agreed that while any indebtedness is outstanding under the Credit Agreement or while the credit facility under the Credit Agreement remains available to the Company, the Company and guarantors under the Credit Agreement would not undertake certain corporate actions without the Lender’s prior written consent.
As disclosed in the Company’s preliminary proxy statement on Schedule 14A, as filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2023, the Company expects to ask its stockholders to approve, at the Company’s upcoming annual meeting of stockholders, the amendment of the Company’s second amended and restated certificate of incorporation (the “Certificate of Incorporation”) to effectuate a reverse stock split of the Company’s outstanding shares of Class A common stock, par value $0.0001 per share, at a ratio of no less than 1-for-10 and no more than 1-for-25, with such ratio to be determined at the sole discretion of the Board (the “Reverse Stock Split”). Pursuant to the terms of the Waiver and Amendment, the Sprott Parties agreed to waive certain provisions of the Credit Agreement so that the Company may effectuate the proposed Reverse Stock Split of the Company’s common stock, including amendment of the Certificate of Incorporation necessary to effectuate the Reverse Stock Split, assuming stockholders approve the Reverse Stock Split. The Reverse Stock Split will not be effectuated unless and until (i) the Company files a definitive proxy statement on Schedule 14A with the SEC, and mails the definitive proxy statement to its stockholders; (ii) amendment of the Certificate of Incorporation to effectuate the Reverse Stock Split is approved by the affirmative vote of a majority of the votes cast by stockholders present and in person (virtually) or represented by proxy and entitled to vote on the matter; and (iii) an amendment to the Certificate of Incorporation to effectuate the Reverse Stock Split is filed with the Delaware Secretary of State. The Board of Directors of the Company also may determine in its discretion to abandon such an amendment, and not effectuate the Reverse Stock Split.
Except as set forth in the Waiver and Amendment, the Credit Agreement remains in full force and effect.
The above description of the Waiver and Amendment is qualified in its entirety by reference to the complete text of the Waiver Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Additional Information and Where to Find It
This filing does not constitute a solicitation of any vote or approval of the proposals to be voted on at the Company’s annual meeting of stockholders. In connection with the Company’s annual meeting, the Company has filed with the SEC a preliminary proxy statement on Schedule 14A, plans to file with the SEC a definitive proxy statement on Schedule 14A, and plans to mail or otherwise provide to its stockholders a proxy statement regarding the business to be conducted at the Company’s annual meeting. BEFORE MAKING ANY VOTING DECISION, THE COMPANY’S STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT (WHEN AVAILABLE) AND ANY AMENDMENTS THERETO (WHEN AVAILABLE) IN THEIR ENTIRETY AND ANY OTHER DOCUMENTS FILED OR TO BE FILED BY THE COMPANY WITH THE SEC IN CONNECTION WITH THE BUSINESS TO BE CONDUCTED AT THE ANNUAL MEETING. Such documents will contain important information regarding the business to be conducted at the annual meeting. Stockholders may obtain a free copy of the proxy statement and other documents the Company files with the SEC (when available) through the website maintained by the SEC at www.sec.gov. A copy of Company’s annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and other documents that the Company files with or furnishes to the SEC are available on the Company’s website at www.hycroftmining.com. Stockholders may also obtain a free copy of the Company’s annual report on Form 10-K, including the financial statements and the financial statement schedules, by visiting the Company’s website or by sending a request in writing to the Company’s Investor Relations Department at info@hycroftmining.com.
Cautionary Note Regarding Forward-Looking Statements
This filing contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, or the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included herein and public statements by our officers or representatives, that address activities, events or developments that our management expects or anticipates will or may occur in the future, are forward-looking statements, including but not limited to such things as future business strategy, plans and goals, competitive strengths and expansion and growth of our business. The words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe” “target”, “budget”, “may”, “can”, “will”, “would”, “could”, “should”, “seeks”, or “scheduled to” and similar words or expressions, or negatives of these terms or other variations of these terms or comparable language or any discussion of strategy or intention identify forward-looking statements. Forward-looking statements address activities, events, or developments that the Company expects or anticipates will or may occur in the future and are based on current expectations and assumptions. Forward-looking statements include, but are not limited to (i) risks related to changes in our operations at the Hycroft Mine including risks associated with the cessation of mining operations at the Hycroft Mine; uncertainties concerning estimates of mineral resources; risks related to a lack of a completed feasibility study; and risks related to our ability to re-establish commercially feasible mining operations; (ii) industry related risks including fluctuations in the price of gold and silver; the commercial success of, and risks related to, our exploration and development activities; uncertainties and risks related to our reliance on contractors and consultants; availability and cost of equipment, supplies, energy, or reagents. The exploration target does not represent, and should not be construed to be, an estimate of a mineral resource or mineral reserve, as ranges of potential tonnage and grade (or quality) of the exploration target are conceptual in nature; there has been insufficient exploration of the relevant property or properties to estimate a mineral resource; and it is uncertain if further exploration will result in the estimation of a mineral resource. These risks may include the following and the occurrence of one or more of the events or circumstances alone or in combination with other events or circumstances, may have a material adverse effect on the Company’s business, cash flows, financial condition and results of operations. Please see the “Risk Factors” set forth the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, and other reports filed with the SEC for more information about these and other risks. You are cautioned against attributing undue certainty to forward-looking statements. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Although these forward-looking statements were based on assumptions that the Company believes are reasonable when made, you are cautioned that forward-looking statements are not guarantees of future performance and that actual results, performance or achievements may differ materially from those made in or suggested by the forward-looking statements contained in this filing. In addition, even if our results, performance, or achievements are consistent with the forward-looking statements contained in this filing, those results, performance, or achievements may not be indicative of results, performance or achievements in subsequent periods. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements made in this filing speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit | ||
| Number | Description | |
| 10.1 | Letter Agreement, dated March 9, 2023, by and among the registrant and Sprott Private Resource Lending II (Collector), LP and Sprott Private Resource Lending II (Co) Inc. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: March 15, 2023 | HYCROFT MINING HOLDING CORPORATION | |
| By: | /s/ Stanton Rideout | |
| Stanton Rideout | ||
| Executive Vice President and Chief Financial Officer | ||
Exhibit 10.1
SPROTT PRIVATE RESOURCE LENDING II (COLLECTOR), LP
SPROTT PRIVATE RESOURCE LENDING II (CO) INC.
200 Bay Street
Suite 2600
Toronto, ON M5J 2J1
March 9, 2023
CONFIDENTIAL
Hycroft Mining Holding Corporation
Autar Gold Corporation (f/k/a Muds Acquisition Sub, Inc.)
AuxAg Mining Corporation (f/k/a Muds Holdco, Inc.)
Hycroft Resources & Development, LLC
Allied VGH LLC
c/o Hycroft Mining Holding Corporation
P.O. Box 3030
Winnemucca, NV 89446
| Re: | Waiver and Amendment |
Ladies and Gentlemen:
Reference is made to (i) that certain Amended and Restated Credit Agreement, dated as of May 29, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and between HYCROFT MINING HOLDING CORPORATION, a Delaware corporation (the “Borrower” or “you”), SPROTT PRIVATE RESOURCE LENDING II (COLLECTOR), LP, a limited partnership organized and existing under the laws of the Province of Ontario (the “Lender,” “us” or “you”), the Guarantors (as defined therein) and the other parties thereto, and (ii) that certain letter agreement, dated as of May 3, 2022 (by and between the Lender, the Borrower and the other Credit Parties party thereto. Capitalized terms used but not otherwise defined in this letter agreement (this “Waiver and Amendment”) shall have the respective meanings ascribed thereto in the Credit Agreement or that certain Royalty Agreement, dated as of May 29, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Royalty Agreement”), by and between Borrower, as “Parent” thereunder, HYCROFT RESOURCES & DEVELOPMENT, LLC, a Delaware limited liability company (the “Owner”), and SPROTT PRIVATE RESOURCE LENDING II (CO) INC., a corporation existing under the laws of Ontario (the “Royalty Payee,” and together with Borrower and Owner, collectively, the “Royalty Agreement Parties”). For the avoidance of doubt, where applicable, the term Credit Parties shall include the Borrower and the Owner in their capacities as parties to the Royalty Agreement.
You have acknowledged that, prior to giving effect to this Waiver and Amendment:
| (a) | Section 8.2(g) of the Credit Agreement requires that “[w]hile any Facility Indebtedness is outstanding or the Facility remains available to the Borrower following the First Tranche Advance, the Credit Parties covenant and agree with the Lender that, except with prior written consent of the Lender, they will not…[ ] purchase, redeem, retire, repurchase and cancel or otherwise acquire for cash, any Equity Interest”. |
| 1 |
| (b) | Section 8.2(h) of the Credit Agreement requires that “[w]hile any Facility Indebtedness is outstanding or the Facility remains available to the Borrower following the First Tranche Advance, the Credit Parties covenant and agree with the Lender that, except with prior written consent of the Lender, they will not…[ ] make any change to their Constating Documents in a manner that adversely affects the interests of the Lender or any Encumbrance granted to the Lender under the Security Documents”. |
| (c) | Section 8.2(k) of the Credit Agreement requires that “[w]hile any Facility Indebtedness is outstanding or the Facility remains available to the Borrower following the First Tranche Advance, the Credit Parties covenant and agree with the Lender that, except with prior written consent of the Lender, they will not…[ ] declare, make, provide for or pay any Distribution”, and “Distribution” is defined as “(i) any dividend or other distribution on issued shares or any other Equity Interest of such Credit Party, other than any dividend or other distribution on issued shares paid by one Credit Party to another Credit Party, (ii) any purchase, redemption or retirement of any issued share, warrant or other Equity Interest or any other option or right to purchase, redeem or retire any share or other Equity Interest of such Credit Party or (iii) any payment whether as consulting fees, management fees or other similar type payments to any Related Party of such Credit Party, other than payments made in the ordinary course of business at fair market value, consistent with past practice”. |
You have requested that we waive Section 8.2(g), Section 8.2(h) and Section 8.2(k) of the Credit Agreement with respect to your contemplated transactions to effect a reverse split of your Common Stock (the “Reverse Split”) and to amend your Constating Documents as required to effect the Reverse Split (the “Constating Documents Amendment”).
Accordingly, we hereby waive Section 8.2(g), Section 8.2(h) and Section 8.2(k) of the Credit Agreement with respect to the consummation of the Reverse Split and the Constating Documents Amendment.
The Borrower represents and warrants that no Default or Event of Default has occurred and is continuing.
The foregoing waivers set forth herein are limited to the provisions and circumstances specifically described herein and nothing in any such waiver is intended or shall be construed to be a waiver by the Lender of any Default or Event of Default (except those described herein above) which may currently exist or hereafter occur. The granting of such waivers shall not affect any other provisions of the Credit Agreement or any other Facility Document and shall not establish a course of dealing between the Borrower and the Lender.
Except as herein modified, the Credit Agreement shall remain in full force and effect. By signing this Waiver and Amendment, each Credit Party confirms that any Security Document or guarantee created or given by it under a Facility Document will continue in full force and effect notwithstanding the waivers given by the Lender under this Waiver and Amendment.
The Credit Parties hereby agree to promptly on demand pay the Lender the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation and execution of this Waiver and Amendment.
This Waiver and Amendment and each of the Prior Waivers constitutes a Financing Document.
This Waiver and Amendment, as it relates to the Credit Agreement, any other Facility Document, any waiver thereunder or otherwise, shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
This Waiver and Amendment shall be binding upon and inure to the benefit of the Credit Parties, the Lender, the Royalty Agreement Parties and their respective successors and permitted assigns. This Waiver and Amendment, as it relates to the Credit Agreement, any other Facility Document or otherwise, may not be assigned by the Credit Parties without the prior written consent of the Lender.
This Waiver and Amendment may be executed by facsimile or other electronic means and in counterparts, each of which shall be considered an original and which taken together shall constitute a single agreement.
[Remainder of page intentionally left blank.]
| 2 |
| Very truly yours, | ||
| SPROTT PRIVATE RESOURCE LENDING II (COLLECTOR), LP, by its general partner, SPROTT RESOURCE LENDING CORP. | ||
| Per: | /s/ | |
| Authorized Signatory | ||
| Per: | /s/ | |
| Authorized Signatory | ||
| SPROTT PRIVATE RESOURCE LENDING II (CO) INC. | ||
| By: | /s/ Narinda Nagra | |
| Name: | Narinda Nagra | |
| Title: | Managing Partner | |
| By: | /s/ Jim Grosdanis | |
| Name: | Jim Grosdanis | |
| Title: | Managing Partner | |
| ACKNOWLEDGED AND AGREED BY: | ||
| HYCROFT MINING HOLDING CORPORATION | ||
| By: | /s/ Stanton Rideout | |
| Name: | Stanton Rideout | |
| Title: | Executive Vice President and Chief Financial Officer | |
| AUTAR GOLD CORPORATION (f/k/a Muds Acquisition Sub, Inc.) | ||
| By: | /s/ Stanton Rideout | |
| Name: | Stanton Rideout | |
| Title: | Executive Vice President and Chief Financial Officer | |
[Waiver and Amendment Signature Page]
| AUXAG MINING CORPORATION (f/k/a Muds Holdco, Inc.) | ||
| By: | /s/ Stanton Rideout | |
| Name: | Stanton Rideout | |
| Title: | Executive Vice President and Chief Financial Officer | |
| HYCROFT RESOURCES & DEVELOPMENT, LLC | ||
| By: | /s/ Stanton Rideout | |
| Name: | Stanton Rideout | |
| Title: | Executive Vice President and Chief Financial Officer | |
| ALLIED VGH LLC | ||
| By: | /s/ Stanton Rideout | |
| Name: | Stanton Rideout | |
| Title: | Executive Vice President and Chief Financial Officer | |
[Waiver and Amendment Signature Page]