Mr. Han Ilhan reports
ALDRIDGE ANNOUNCES US$45 MILLION FINANCING WITH ORION MINE FINANCE AND EXISTING SHAREHOLDERS
Aldridge Minerals Inc. has executed definitive agreements with
Orion Fund JV Ltd., an affiliate of the Orion Mine Finance funds,
in connection with a $10-million (U.S.) equity private placement,
which includes participation by the company's two largest shareholders,
and a $35-million (U.S.) bridge loan facility. Aldridge has also entered into lead concentrate and gold
offtake agreements with an Orion affiliate, which are
conditional upon Aldridge receiving financing from Orion under the private
placement and the loan. Closing of the private placement and the initial advance under the loan are expected to occur in
September, 2014. The private placement, loan and offtakes are
collectively referred to as the transaction.
Han Ilhan, president and chief executive officer of Aldridge, commented: "The transaction is a
major achievement for Aldridge, and represents a key step towards
financing the development and construction of our Yenipazar project in
central Turkey. The private placement and the loan should enable the
company to complete the land acquisition at Yenipazar while advancing
basic and detailed engineering for the project. The accomplishment of
these remaining milestones is key to realizing our objective of securing
project financing for Yenipazar in 2015. We believe that this
transaction demonstrates the confidence shown in the Yenipazar project,
the company's management and its board by one of world's pre-eminent
resource-focused investment funds. We look forward to a long-term
relationship with Orion while we continue to advance the project to
production."
$10-million (U.S.) private placement
On the closing date, Orion
will purchase 11,660,611 common shares of Aldridge through a non-brokered private placement for gross proceeds of
$5,247,275 (U.S.), representing a purchase price of 45 U.S. cents per common share
or approximately 49 cents per common share, which is a 69-per-cent premium to
the closing price of the common shares on the TSX Venture Exchange on Aug. 28, 2014.
The company's two largest shareholders, ANT Holding Anonim Sti. and APMS Investment Fund Ltd. (formerly Mavi Investment Fund Ltd.)
(APMS), will participate in the private placement to maintain their
present 30.1-per-cent and 17.4-per-cent ownership positions, respectively. ANT will
purchase 6,696,732 common shares at a price of 45 U.S. cents per common share
for gross proceeds of $3,013,529 (U.S.). APMS will purchase 3,864,879 common
shares at a price of 45 U.S. cents per common share for gross proceeds of
$1,739,195 (U.S.). In recognition of investing at a substantial premium to
the market price of the common shares, ANT and APMS will also receive
one common share purchase warrant for each common share
purchased through the private placement. Each warrant will entitle the
holder to acquire one common share at a price of $1.00 (U.S.) for a period of
two years from the closing date. The common shares and the warrants, and
the common shares issuable on exercise of the warrants, will be subject
to a four-month hold period from the closing date under applicable
securities laws.
In connection with the private placement, Orion, which, following
completion of the private placement, will own approximately 10.9 per cent of the
outstanding common shares, has been granted the right to nominate one
individual for election to the board of directors of the company for 24
months following the closing date and thereafter for such time as Orion
owns at least 10 per cent of the outstanding common shares, subject to certain
adjustments. Subject to exchange approval, a representative of Orion
will be appointed to the board of directors on the closing date.
Each of Orion and APMS retains anti-dilution rights, which will allow
Orion and APMS to each proportionately participate in future financings
based on the ownership interest each holds in Aldridge at the time of
the financing. Each respective right will terminate if, at any time on
or after the second anniversary of the closing date, Orion or APMS owns
a number of common shares representing less than 10 per cent of the total number
of common shares outstanding (excluding certain outstanding common
shares) at such time.
$35-million (U.S.) loan
The loan significantly strengthens
Aldridge's balance sheet and provides financial flexibility to complete
the company's key corporate growth objectives. Together with the net
proceeds of the private placement, the loan will be used to finance the
Yenipazar land acquisition, to advance basic and detailed engineering, and
for general working capital purposes through to project financing.
Loan highlights:
-
Principal amount of $35-million (U.S.);
-
Term of two years following the closing date;
-
Interest is 9 per cent per annum plus the greater of the three-month LIBOR (London interbank offered rate) in U.S. dollars and 1 per cent.
Interest will accrue over the term of the loan and will be capitalized
monthly;
-
Early repayment of the loan may occur at any time without charges
(other than customary breakage costs);
-
The loan is not subject to any structuring or arrangement fees;
-
Orion will have first-priority security interest in all of the
material assets of the company and Aldridge Mineral Madencilik Ltd.
Sti. Such security will be released following full repayment of
the loan plus all accrued interest.
Lead concentrate and gold offtakes
Aldridge and Orion,
together with Aldridge's wholly owned subsidiary Aldridge Mineral
Madencilik (Aldridge Turkey), have also entered into
definitive offtakes, which are conditional upon Aldridge receiving
financing from Orion under the private placement and the loan. Under the
offtakes, Aldridge Turkey has agreed to sell and Orion has agreed to
purchase on a take-or-pay basis certain lead concentrate and gold
expected to be produced at the company's Yenipazar project. Aldridge
Turkey will sell 50 per cent of the gold produced over the first 10 years of
the mine plan at Yenipazar, subject to minimum total deliveries of
237,089 ounces of gold. Aldridge Turkey will also sell 5,000 dry metric
tonnes of lead concentrate per annum to Orion over the first 10 years
of the mine plan at Yenipazar, corresponding to approximately 20 per cent of the
total lead concentrate volume, subject to minimum total deliveries of
50,000 dry metric tonnes of lead concentrate. The payment price for both
the lead concentrate and the gold will be determined in the context of
the market at the time of delivery, subject to certain quotational
periods. The offtakes underscore Orion's confidence in the project and
will assist Aldridge in demonstrating bankable revenue streams to
prospective project lenders.
Regulatory
Subject to the approval of the exchange, a
director of Aldridge will receive approximately $332,000 (U.S.) in finders'
fees in connection with securing the private placement investments from
ANT and APMS.
The closing of the transaction is conditional upon customary closing
conditions, including the approval of the exchange.
We seek Safe Harbor.
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