Avanti Mining Arranges US$10 Million Bridge Loan and Restructures Existing
US$20 Million Bridge Financing
VANCOUVER, BC -- (Marketwired) -- 07/04/13 -- Avanti Mining Inc.
(TSX VENTURE: AVT) (PINKSHEETS: AVNMF) and its wholly owned
subsidiary Avanti Kitsault Mine Ltd. ("Avanti" or the "Company")
announces that it has entered into a binding and committed term sheet
with CEF Holdings Limited ("CEF") and Resource Capital Fund IV L.P.
("RCF") (collectively referred herein as Lenders) that provides an
additional US$10 million secured bridge loan from RCF and extends and
restructures its existing US$20 million bridge loan. Of the $10
million new funding, $5 million will be advanced on closing with the
remaining $5 million to be advanced in two tranches of $2.5 million
upon satisfaction of certain conditions. The credit committees of
both Lenders have approved the term sheet and closing of the
facility, is expected on or before July12, 2013, subject to
satisfactory completion of final loan documents and other customary
The purpose of the loan is to provide the Company with additional
time to provide debt, equity and strategic partnership financing that
will collectively provide the funds necessary for the development of
the Kitsault Mine Project in northern BC.
The loan will accrue interest at 10% and all interest and arrangement
fees are payable in cash or shares of Avanti at the choosing of each
lender. The Company will pay the Lenders a 5% extension fee on the
US$20 million bridge in cash or shares at the election of each lender
and issue the Lenders an aggregate of 10 million three-year warrants
with an exercise price to be established at a 35% premium to the
previous 20-day VWAP of Avanti shares at the time of closing. On the
new $10 million bridge loan facility with RCF, the Company will pay a
5% establishment fee in cash or shares at their election and issue 10
million three-year warrants with an exercise price to be established
at a 35% premium to the previous 20-day VWAP of Avanti shares at the
time of closing.
Both loans will convert into Convertible Debentures on December 31,
2013 if Avanti has not completed a Rights Offering of no less than
US$175 million with the possibility of all or a portion of this
Rights offering to be back stopped by the Lenders. The Convertible
Debentures will be due on December 31, 2014 with a conversion price
of $0.07 per share. The minimum price of the Rights Offering will be
C$0.05 share in accordance with the TSX-V policies.
The bridge financing will be secured by a first charge on the assets
of the Company shared pro-rata by the Lenders and replacing the
security under the existing loan facilities.
"The new financing provides Avanti with funding for the planned
activities for the balance of this year, during which we will be
working to arrange the total debt and equity financing needed to
build the Kitsault project," said A J Ali, Chief Financial Officer.
"We are very pleased to have CEF and RCF as lenders and investors in
Avanti as they are both sophisticated investors who realizes the
intrinsic value of Kitsault," said Craig J. Nelsen, President & CEO.
"We also greatly appreciate the continued support of RCF in providing
CEF Holdings Limited is a Hong Kong incorporated company and is 50%
owned by Cheung Kong (Holdings) Limited, a company listed on the Main
Board of the Hong Kong Stock Exchange, and 50% owned by Canadian
Imperial Bank of Commerce of Canada. CEF operates a natural resources
fund that principally invests in mining ventures.
Resource Capital Fund IV L.P. ("RCF") is a private equity fund with
mandates to make investments exclusively in the mining sector across
a diversified range of hard mineral commodities and geographic
regions. RCF is managed by RCF Management L.L.C., which has its
principal office in Denver and additional offices in Perth, New York
(Long Island) and Toronto. RCF has provided financing for Avanti to
acquire and develop the Kitsault deposit since 2008 and owns
approximately 37% of the Company's issued and outstanding shares. In
addition, RCF has recently raised over $2 billion in Resource Capital
Fund VI whose purpose is to provide equity financing for construction
of minor metal and other mining projects.
The Company is focused on the development of the past producing
Kitsault molybdenum mine located north of Prince Rupert in British
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements: This news release contains certain
forward-looking information concerning the business of Avanti Mining
Inc. All statements, other than statements of historical fact,
included herein including, without limitation, the Company's plans to
arrange a new loan, to arrange debt and equity financing to build the
Kitsault project, and the development of the Kitsault project, are
forward-looking statements. These forward-looking statements are
based on the opinions of management at the date the statements are
made and are based on assumptions and subject to a variety of risks
and uncertainties and other factors that could cause actual events to
differ materially from those projected in forward-looking statements.
Important factors that could cause actual results to differ
materially from the Company's expectations include fluctuations in
commodity prices and currency exchange rates; uncertainties relating
to interpretation of drill results and the geology, continuity and
grade of mineral deposits; uncertainty of estimates of capital and
operating costs, recovery rates, production estimates and estimated
economic return; the need for cooperation of government agencies and
native groups in the exploration and development of properties and
the issuance of required permits; the need to obtain additional
financing to develop properties and uncertainty as to the
availability and terms of future financing; the possibility of delay
in exploration or development programs or in construction projects
and uncertainty of meeting anticipated program milestones;
uncertainty as to timely availability of permits and other
governmental approvals; results of negotiations with a potential
strategic partner and other risks and uncertainties disclosed in the
Company's Annual Information Form for the year ended December 31,
2011, which is available at www.sedar.com. The Company is under no
obligation to update forward-looking statements if circumstances or
management's opinions should change, excepting as required by
applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking statements.
For further information, please visit www.avantimining.com, or contact:
Chief Financial Officer
Craig J. Nelsen
Chief Executive Officer
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