VANCOUVER, Sept. 27, 2012 /CNW/ - Golden Predator Corp. (TSX:GPD) (the "Company") is pleased to announce that it has executed definitive
agreements with MF Investment Holding Company 1 (Cayman) Limited ("MF Investment"), part of the Red Kite group, for a senior secured loan
facility in the principle amount of USD $35,000,000 (the "Loan"). The
Loan proceeds will be utilized to develop the Brewery Creek project and
complete the Brewery Creek acquisition.
"We are pleased that Red Kite has appreciated the opportunities
presented by our Brewery Creek project. This financing consolidates our
interest in the project and ensures Brewery Creek moves forward as
planned," said William M. Sheriff, Chairman and CEO. We look forward
to Brewery Creek advancing towards becoming the Yukon's next gold
producer in 2014."
USD $35,000,000 Loan Facility
The Loan will be provided through three advances, the first advance of
USD $10,000,000 having been provided on September 25, 2012 and two
subsequent advances of USD $10,000,000 and USD $15,000,000,
respectively, being made on completion of certain specified conditions
including delivery of an acceptable pre-feasibility study and receipt
of any required permit amendments for the Brewery Creek Project.
The first $10,000,000 of the Loan matures on July 1, 2015, the next
$15,000,000 on March 31, 2016 and the final $10,000,000 matures on
December 31, 2016. The Loan bears interest payable at LIBOR plus 8%
per annum, subject to a minimum interest rate of 10%. As a condition
to the second advance of the Loan, the Company has agreed to enter into
an offtake agreement under which it will sell to MF Investment the
first 500,000 ounces of gold produced from the Brewery Creek Project at
a discount of 1.5% to the spot price.
Of the initial advance, CAD $3,205,000 was used to complete the
acquisition by Golden Predator of the Brewery Creek Project from Alexco
Resource Corp. ("Alexco") as more particularly described below, with
the balance of the net proceeds of the Loan will be used exclusively to
fund the working capital requirements of the Company related to or
arising in connection with the exploration and development of the
Brewery Creek Project.
Brewery Creek Purchase
The Company has closed the previously disclosed transactions
contemplated under the purchase agreement dated February 14, 2012 among
Alexco, the Company and Golden Predator Canada Corp. (the "Purchase
Agreement"). The Company now owns a 100% interest in the Brewery
Creek Project, subject to a 2% net smelter royalty ("NSR") in favour of
Alexco on the first 600,000 ounces of gold produced from the Brewery
Creek Project, following which the NSR will increase to 2.75%. The
Company has the right to repurchase 0.625% of the increased NSR for CAD
$2,000,000 (which, if so acquired, would result in a 2.125% NSR on gold
In exchange for a 100% interest in the Brewery Creek Project and in
addition to the NSR, the Company paid to Alexco CAD $3,205,000,
representing the cash consideration to be paid under the Purchase
Agreement (CAD $4,000,000) less the amount of the reclamation bond that
had been posted by Alexco with the Yukon government (CAD $795,000) and
issued to Alexco 7,500,000 common shares and 3,750,000 share purchase
warrants of the Company (the "Warrants"), each Warrant entitling Alexco
to purchase one additional common share of the Company at a price of
CAD $1.15 for a period of two years from closing.
About Golden Predator
Golden Predator Corp., Yukon's Gold Company, is mandated to become a
mid-tier gold producer. Golden Predator's road-accessible advanced
properties include its flagship Brewery Creek Project as well as its
Grew Creek and Clear Creek Projects. Golden Predator is committed to
moving aggressively to a near term production decision while expanding
the existing NI 43-101-compliant resource at Brewery Creek.
Golden Predator has one of the largest controlled land positions in the
Yukon, with exploration holdings in excess of 1.0 million acres, and is
committed to strong relationships with First Nations and communities.
Golden Predator's highly skilled management and technical teams
continue to lead quality exploration programs in the underexplored
regions of the Yukon, focused on advancing new discoveries and leaving
a positive legacy.
About RK Mine Finance
RK Mine Finance provides mining companies with project financing and
metal off-take agreements for initiation or expansion of mine
production and is part of the Red Kite group. Red Kite operates across
the global metals industry from offices in Bermuda, Denver, Hong Kong,
London, New York, Shanghai and Sydney. Investors in Red Kite funds
include college endowments, foundations, family offices, pensions and
other institutional investors.
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein. This
press release contains projections and forward-looking information that
involve various risks and uncertainties regarding future events. Such
forward-looking information can include, without limitation, statements
based on current expectations involving a number of risks and
uncertainties and are not guarantees of future performance. There are
numerous risks and uncertainties that could cause actual results and
Golden Predator's plans and objectives to differ materially from those
expressed in the forward-looking information. Actual results and
future events could differ materially from those anticipated in such
information. These and all subsequent written and oral forward looking
information are based on estimates and opinions of management on the
dates they are made and are expressly qualified in their entirety by
this notice. Except as required by law, the Golden Predator assumes no
obligation to update forward-looking information should circumstances
or management's estimates or opinions change.
SOURCE: Golden Predator Corp.
For further information:
Golden Predator Corp.
William M. Sheriff, Chairman & Chief Executive Officer
(604) 648-GOLD (4653)
RK Mine Finance