Mr. Frank Callaghan reports
BARKERVILLE GOLD MINES LTD. RECEIVES A TERM SHEET FOR A $15 MILLION
GOLD LOAN FACILITY AND MAKES APPLICATION TO THE TSX-V FOR REINSTATEMENT
Barkerville Gold Mines Ltd. has entered into a term sheet with 2176423 Ontario Ltd., which the company is informed is wholly owned by Eric Sprott, respecting a proposed $15-million gold
loan facility to be provided to the company by the lender. The facility is expected to be advanced to the
company on or about Oct. 4, 2013, in conjunction with the company's planned reinstatement for trading on the
TSX Venture Exchange, assuming the successful completion of the company's reinstatement application
with the TSX-V, in a single advance of $15-million in accordance with the terms and conditions of a proposed credit
agreement, which is presently being prepared. The company intends to use the proceeds of the facility to pay for existing
trade payables, to repay its recent bridge loan of $1.5-million and for the payment of operating expenses on a going-forward basis.
The facility is to be guaranteed by the company's subsidiaries, and
secured by a first-ranking security over all of the credit parties' present and future assets and a pledge of the shares of the
company's subsidiaries. The facility is to be due and payable in full on or before 30 months after the
closing date, and the company may not voluntarily prepay the facility at any time prior to maturity without the lender's
prior written consent. The facility does not bear interest. The facility is to be repaid through three cash payments made
every 10 months after the closing date, based each time on what would be the notional value of 4,166.67 ounces of
gold to be deliverable on each such repayment date (being 12,500 ounces over the term of the facility) and priced at the
then Bloomberg composite closing value of gold (ticker: GLD) at 4 p.m. on the day prior to each particular repayment
date over the term of the facility. If the then current gold price is less than $1,200 (U.S.) per ounce
on a particular repayment date, then the company's corresponding repayment amount shall be determined using a
reference price of $1,200 (U.S.) per ounce. If the then current gold price is above $1,600 (U.S.) per ounce on a particular
repayment date, then the company's corresponding repayment amount shall be determined using a reference price of
$1,600 (U.S.) per ounce. Notwithstanding the foregoing, the company will guarantee a minimum rate of return to the lender
of 10 per cent per year on the aggregate principal amount of the facility over the life of the facility.
In consideration for the advance of the facility and currently therewith, the company, subject to prior TSX-V approval,
will issue nine million transferable share purchase warrants of the company that will be
exercisable for 30 months, and will be exercisable at the price which is the greater of 50 cents and a 20-per-cent premium to
the volume-weighted average trading price of the company's common shares on the TSX-V for the five-trading-day
period commencing five trading days after the company's common shares are reinstated for trading. After reinstatement for trading of the company and in the event that the volume-weighted average trading price
of the company's common shares on the TSX-V for a period of 10 consecutive trading days is at a 50-per-cent premium to the
exercise price, the company may require the lender to exercise $5-million worth of the bonus
warrants within 10 calendar days of the date the company provides written notice to the lender. Furthermore, in consideration for structuring the facility, the company has agreed to
pay the lender a $125,000 structuring fee, together with the lender's reasonable legal and other out-of-pocket expenses
incurred in connection with the facility.
In conjunction with the planned facility closing the company has now made a formal application to the TSX-V to have
its common shares reinstated for trading.
We seek Safe Harbor.
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