Shares of Silver Bear Resources (TSX: SBR) dropped after two major Russian shareholders announced that they are converting promissory notes at a sharp discount to the junior’s current share price.
Inflection Management Corporation, an investment company owned by Russian businessman Sergey Kolesnikov, and A.B. Aterra Resources, owned by Russian billionaire Alexey Mordashov, informed the markets in separate press releases on Aug. 30 that they were converting their 15% convertible promissory notes due Dec. 31 at 4.5¢ per share.
Shares of Silver Bear, which is building a mine at its Mangazeisky silver project, 400 km north of Yakutsk in Russia’s Far East, fell 9.4% on Aug. 30 and dropped another 16.7% on Aug. 31. The shares were down a further 5% to 19¢ in early afternoon trading on Sept. 1.
In its notice of conversion, Inflection said it was exercising its right to convert its entire C$13.52 million principal amount and all of the C$3.52 million accrued and unpaid interest, into ordinary shares of Silver Bear at the conversion price of C4.5¢ per share.
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