08:16:44 EDT Fri 29 Mar 2024
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or Name
USA
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Aldridge Minerals Inc
Symbol AGM
Shares Issued 84,733,660
Close 2014-08-28 C$ 0.29
Market Cap C$ 24,572,761
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Aldridge arranges $45-million (U.S.) of financings

2014-08-29 15:46 ET - News Release

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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