01:15:35 EDT Wed 19 Jun 2019
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Vendetta Mining Corp
Symbol C : VTT
Shares Issued 156,960,612
Close 2019-04-11 C$ 0.10
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Vendetta signs $3M (Australian) term sheet with Nebari

2019-04-12 09:08 ET - News Release

Mr. Michael Williams reports


Vendetta Mining Corp. has entered into a non-binding term sheet for a proposed financing transaction with Nebari Holdings LLC.

The proceeds of the proposed financing are planned to be used to pay the final Pegmont lead-zinc property payment of $3-million (Australian) and, in doing so, complete the company's acquisition of a 100-per-cent interest in the Pegmont lead-zinc project.

Michael Williams, Vendetta's president and chief executive officer, commented: "Upon completion, this financing will secure the balance of the 100-per-cent acquisition of the Pegmont project, while the recently announced private placement will provide the company with sufficient working capital to execute the company's goals for the next 12 months. We would like to thank Nebari for aligning with our corporate objectives to the satisfaction of both parties.

"This financing is also based on consideration of the cost of capital and eliminating further extension payments. With the completion of the PEA [preliminary economic assessment] and 100-per-cent ownership, the company will be positioned to further advance the Pegmont project and deliver shareholder value."

The material terms of the financing, as set forth in the term sheet, include the following:

  • Nebari will lend Vendetta the principal amount of $2,556,818 (U.S.) for a term of 24 months.
  • Interest is calculated at 6 per cent plus three-month LIBOR (London interbank offered rate) (currently 2.6 per cent), with a floor of 2.5 per cent. Interest will amortize for the first six months. Following that cash repayment holiday, Vendetta can elect to pay cash interest between 50 per cent and 100 per cent of the interest quarterly, with any balance being capitalized and added to the principal amount of the loan, payable upon maturity.
  • Vendetta can repay the loan with any accrued interest, in whole or in part, at any time without penalty.
  • Upon repayment of the loan, a repayment bonus equal to 20 per cent of the financed amount indexed to the increase in market capitalization will be due to Nebari.
  • The transaction is subject to Nebari completing confirmatory due diligence to its satisfaction as well as TSX Venture Exchange approval.
  • The loan will be secured against the company's assets.

About the Pegmont lead-zinc project

Pegmont is situated in the Mount Isa-McArthur mineral province, which hosts one of the world's richest endowments of lead-zinc-silver mineralization, including several world-class lead-zinc-silver mines.

The current mineral resource at Pegmont includes:

  • Indicated -- 5,758 kilotonnes at 6.5 per cent lead, 2.6 per cent zinc and 11 grams per tonne silver;
  • Inferred -- 8,277 kilotonnes at 5.1 per cent lead, 2.8 per cent zinc and eight grams per tonne silver.

The results of a preliminary economic assessment at Pegmont were released by the company on Jan. 28, 2019 (see Vendetta news release dated Jan. 28, 2019). The preliminary economic assessment outlined a 10-year mine plan that generates a strong economic return with a pretax internal rate of return of 32 per cent (24 per cent after tax) and a net present value at an 8-per-cent discount (NPV8) of $201-million ($128-million after tax) for the base case long-term consensus metal prices assumed (91 cents per pound of lead, $1.09 per pound of zinc and $16.50 per ounce of silver).

The spot price and exchange rate case demonstrate the strong sensitivity to metal prices, with a pretax IRR of 37 per cent (27 per cent after tax) and an NPV8 of $249-million ($158-million after tax) using Jan. 22, 2019, metal prices of 94 cents per pound of lead, $1.25 per pound of zinc and $15.30 per ounce of silver, and an exchange rate of $1 (U.S.) for 71 Australian cents.

The preliminary economic assessment further identified project enhancements and Vendetta has identified several high-priority exploration targets.

About Vendetta Mining Corp.

Vendetta is a Canadian junior exploration company engaged in acquiring, exploring and developing mineral properties, with an emphasis on lead and zinc. It is currently focused on advanced-stage exploration projects in Australia, the first of which is the Pegmont lead-zinc project.

Technical disclosure

Peter Voulgaris, MAIG, MAusIMM, a director of Vendetta, is a non-independent qualified person as defined by National Instrument 43-101. Mr. Voulgaris has reviewed the technical content of this press release and consents to the information provided in the form and context in which it appears.

For details of the Pegmont project, including the effective date of the resource estimate, quality control measures applied, key assumptions, parameters and methods used to estimate the mineral resources set forth herein, and any known legal, political, environmental or other risks that could materially affect the potential development of the mineral resource estimate, please refer to the technical report entitled, "Technical Report -- Pegmont Mineral Resource Update and PEA," dated effective Jan. 21, 2019, and available under the company's profile on SEDAR.

The preliminary economic assessment referred to herein is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.

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