07:25 AM EDT, 06/03/2024 (MT Newswires) -- Gold Mountain Mining ( GMTNF ) said on Monday that it agreed to settle all of the secured debt of Nhwelmen Construction Limited Partnership, which is currently owed $6.5 million.

Nhwelmen, the contract miner at the company's Elk Gold Mine, has agreed to accept 50 million common shares in payment of $1.5 million of the Nhwelmen secured debt at $0.03 per share.

Also, the company will issue a $5 million convertible secured debenture, representing the remaining amount of the Nhwelmen secured debt.

The debenture is convertible at Nhwelmen's option into 62.5 million common shares at $0.08 per share. The convertible debenture will mature on the date that is four years from the date of issuance and will accrue interest at the rate of 12% per annum, calculated monthly and payable in cash in arrears on each anniversary date from the date of issuance

Further, the company plans to approach certain unsecured vendors who provide critical services to the company to convert nearly $1.7 million of unsecured debt for settlement of such debts in payment of common shares at $0.03 per share.

The maximum number of securities issuable, assuming the conversion of the convertible debenture, will be roughly 169.2 million common shares, representing 24.63% of the issued and outstanding common shares on a pre-transaction, non-diluted basis.

Nhwelmen currently owns about 166.7 million common shares, representing about 24% of the outstanding common shares.