October 10, 2014, Vancouver, BC -- Quartz Mountain Resources Ltd. ("Quartz Mountain" or the "Company") (TSX-V: QZM; OTCBB: QZMRF) announces that Bear Claw Capital Corp. ("Bear Claw") has agreed to further amend the terms of a convertible debenture note ("Debenture") that formed part of the payment obligations under a 2012 mineral property purchase agreement to acquire the Gnat Pass Property, which is a portion of the Quartz Mountain's Galaxie Project located in northwestern British Columbia.
The current Principal Sum of the Debenture is $550,000. The terms of the amended agreement include:
The Principal Sum outstanding on the Debenture will bear interest from October 1, 2014 until the Final Repayment Date. The interest rate has been reduced to 7.5% per annum.
A Principal repayment of $50,000 was made upon signing of the amended Debenture, and a further amount equal to the lesser of (i) $50,000 and (ii) the outstanding Principal Sum will be repaid to Bearclaw on or before the 31st day of January of each year, commencing with the 31st day of January 2015 until the Debenture has been repaid in full.
If, at any time from and after the date of the amended agreement until the Debenture shall have been repaid in full, a new equity investment consisting of cash proceeds of at least $1,000,000 is made in Quartz Mountain by one or more investors (the "New Financing"), then fifty percent (50%) of the outstanding balance of the Principal Sum as of the date of such New Financing, plus all accrued but unpaid Interest thereon, shall automatically convert into fully paid common shares of the Company (the "Conversion Shares") at an agreed conversation price equal to the greater of the 20 day closing VWAP for the common shares of the Company and the purchase price under the New Financing for the Principal Sum, subject to the rules and policies of the TSX Venture Exchange, with the conversation price for any interest payable being based on the Market Price under TSX Venture Exchange rules.
Quartz Mountain may repay the Principal Sum at any time without penalty.
The amendment is subject to TSX Venture Exchange approval if and as required.
About Quartz Mountain Resources Ltd.
Quartz Mountain is a Vancouver-based exploration company focused on making a major new deposit discovery in British Columbia. The Company is associated with Hunter Dickinson Inc. (HDI), a diversified, global mining group with more than 25 years of mineral development success.
For further details, please visit the Company's website at www.quartzmountainresources.com or contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114.
On behalf of the Board of Directors
Ronald W. Thiessen
President and CEO
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