DENVER, CO, July 16, 2013 /CNW/ - Resource Capital Fund IV ("RCF IV") and Resource Capital Fund VI ("RCF VI") reports that on July 12, 2013, RCF IV, RCF VI, CEF Holdings Limited
("CEF"), Avanti Mining Inc. ("Avanti") and its wholly-owned subsidiary, Avanti Kitsualt Mine Ltd., entered
into a loan agreement (the "Loan Agreement") in order to (i) restructure the US$20 million existing indebtedness
of Avanti (the "Existing Loan"), US$10 million of which was loaned to Avanti by RCF IV and US$10
million of which was loaned to Avanti by CEF and (ii) provide Avanti
with an additional US$10 million bridge loan (the "Additional Loan", together with the Existing Loan, the "Loans"). RCF VI advanced US$5 million of the Additional Loan to Avanti upon
signing the Loan Agreement and will advance the remaining amount
subject to the terms and conditions described in the Loan Agreement.
RCV IV and RCF VI are under common management by RCF Management LLC and
are referred to herein together as "RCF". RCF IV and RCF VI may acquire the following securities of Avanti in
connection with the Loans:
Pursuant to the terms of the Loan Agreement, Avanti agreed to pay RCF IV
an extension fee equal to 5% of the Existing Loan, or US$500,000, and
to pay RCF VI an establishment fee equal to 5% of the Additional Loan,
or US$500,000. RCF IV and RCF VI each elected to receive these
payments in common shares of Avanti (the "Fee Shares") to be issued on the earlier of December 31, 2013 or the completion of
a rights offering by Avanti pursuant to the terms and conditions of the
Loan Agreement. The Fee Shares shall be issued at the maximum discount
allowed under the policies of the TSX Venture Exchange (the "TSXV") to the volume weighted average price for Avanti's common shares on
the TSXV for the twenty trading days prior to the date of
In connection with the Loans, RCF IV and RCF VI were issued 5,000,000
and 10,000,000 common share purchase warrants of Avanti (the "Warrants"), respectively. Each Warrant entitles the holder to acquire one
common share of Avanti at an exercise price of C$0.08478 for a period
of three years from the date of issuance.
Interest accrues on the Loans at a rate of 10% per annum, payable
quarterly in arrears. RCF may elect that Avanti pay accrued interest
in common shares (the "Interest Shares"). The Interest Shares shall be issued at the volume weighted average
price for Avanti's common shares on the TSXV for the twenty trading
days prior to the interest payment date.
Pursuant to the Loan Agreement, if Avanti does not complete a rights
offering on the terms and conditions set out therein by December 31,
2013, the Loans will automatically become convertible into common
shares of Avanti (the "Conversion Shares"). The Conversion Shares shall be issued at C$0.07 per share.
Immediately prior to entering into the Loan Agreement, RCF owned and
controlled 161,542,535 common shares of Avanti representing
approximately 37.20% of Avanti's outstanding common shares. Assuming
the exercise of the Warrants, and the issuance of the Fee Shares, the
Interest Payment Shares and the Conversion Shares, each at an assumed
issue price of C$0.07 and assuming C$1.00 equals US$1.00, RCF would own
and control 357,142,857 common shares of Avanti representing
approximately 48.45% of Avanti's outstanding common shares.
The securities of Avanti are being acquired by RCF for investment
purposes. RCF will evaluate its investment in Avanti from time to time
and may, based on such evaluation of market conditions and other
circumstances increase or decrease its shareholding in Avanti.
This press release is issued pursuant to National Instrument 62-103 -
The Early Warning System and Related Take-Over Bid and Insider
Reporting Issues, which also requires a report to be filed with
regulatory authorities in each of the jurisdictions containing
additional information with respect to the foregoing matters (the "Early Warning Report"). For further information and to obtain a copy of the Early Warning
Report filed under applicable Canadian securities laws in connection
with the transactions hereunder, please see Avanti's profile on the
SEDAR website www.sedar.com.
SOURCE: Resource Capital Fund IV L.P.
For further information:
Resource Capital Fund IV L.P and Resource Capital Fund VI L.P.
1400 Sixteenth Street, Suite 200,
Denver, CO, 80202,
Telephone: (720) 946-1444