Richmont Mines Inc. (TSX:RIC,NYSE:RIC) closed the Senior Secured Credit Facility for up to $50,000,000 with Macquarie Bank Limited, to advance its Island Gold Deep project in Ontario.
As quoted in the press release:
The $50 million Facility consists of three tranches, all of which are subject to certain conditions being met prior to drawdown. The Facility terms have been slightly adjusted from those set out in the initial Letter of Offer for the Facility, most notably to provide for a longer availability period under Tranche A which allows the Corporation more flexibility to manage Facility drawdowns and reduce interest financing costs. The final terms of the Facility are outlined below:
- Tranche A: $12.5 million. Available as a single drawdown until September 30, 2013, with an initial maturity date of September 30, 2014. The maturity date may be extended by 21 months, until June 30, 2016, if an initial gold hedging program (Initial Gold Hedging) is established before December 31, 2013 on a total of 50,000 ounces over a 30 month period ending June 30, 2016 at a minimum price of US$1,300/oz. If the 50,000 ounces of hedging is established before September 30, 2013, the drawdown availability period will be extended to March 31, 2014.
- Tranche B: $12.5 million. Available as a single drawdown until December 31, 2013, which may be extended by an additional 6 months to June 30, 2014 if the Initial Gold Hedging is established before December 31, 2013. The availability of Tranche B is subject to certain conditions being met including that the Corporation executes the Initial Gold Hedging and an additional gold hedging program covering an additional 75,000 ounces (for a total of 125,000 ounces if both Tranche A and Tranche B are drawn) at a minimum price of US$1,350/oz, for the period from the tranche drawdown date through December 31, 2017. The maturity date of this tranche is December 16, 2016.
- Tranche C: $25 million. This tranche is subject to certain additional conditions, and has a final maturity of December 31, 2017. In order to have access to this tranche the Corporation must have fully drawn on tranches A and B, and would have to meet other conditions, including receipt of additional required MBL approvals.
According to the terms of the Facility, the Corporation issued warrants for the purchase of 1,250,000 Richmont shares to MBL on the date of the closing of the Facility Agreement. The warrants will expire 3 years from the original date of their issue to MBL. A total of 812,500 warrants vested immediately upon closing of the Facility Agreement, with a strike price of CAN$2.45 per share. The remaining 437,500 warrants will vest when certain conditions to drawdown Tranche B are fully met by the Corporation. These warrants will also have a strike price of CAN$2.45 per share.
Richmont Mines Inc. President and CEO, Paul Carmel, said:
We are delighted to have closed this financing with Macquarie. It is testimony to the quality of our Island Gold Deep project, an asset with significant future potential for the Corporation and its shareholders. The loan provides Richmont with additional flexibility and financial strength to unlock Island Gold Deep’s potential and allow the Corporation to enter its next phase of growth.