The shares are payment of a portion of interest accrued on $18mln principal amount convertible bonds issued to GRF, a resource fund managed by GEMS Investment Management Ltd. of Hong Kong. Interest is payable on the bonds quarterly at 7% per annum, of which 4.5% is payable in cash and 2.5% in shares.
The shares will be issued at a deemed price of six cents per share, the closing TSX Venture Exchange price of the shares for the day preceding the interest payment date of Dec. 15, 2016.
Upon completion of the issue, GRF will own 10,585,940 shares, representing approximately 5.6% of the company's 189,265,344 shares issued and outstanding.
Primeline shares were up 20% at C$0.06 on Friday.