TORONTO, March 25, 2015 /CNW/ - Orion Mine Finance announced today that Orion Fund JV Limited ("Orion Fund JV"), a company managed by Orion Mine Finance Management I Limited ("Orion"), has entered into a subscription with Red Eagle Mining Corporation ("Red Eagle") whereby Orion Fund JV has agreed to purchase newly issued common shares of Red Eagle (the "Offered Shares") at a price of CAD$0.33 per Offered Share in an amount equal to the lesser of: (a) USD$4 million divided by the US dollar equivalent of CAD$0.33 on the closing date, and (b) such number of Offered Shares as would result in Orion Fund JV owning 19.99% of the outstanding common shares of Red Eagle (the "Common Shares") after giving effect to the transaction. Closing of the purchase is subject to TSX Venture Exchange approval and other customary conditions, and the concurrent closing of the Credit Agreement (as defined below). Assuming a USD:CAD exchange rate of 0.80:1.00, Orion Fund JV would acquire 14,640,000 Offered Shares, representing approximately 15.84% of the outstanding Common Shares after giving effect to the transaction (not taking into account the issue or exercise of any of the Warrants (as defined below)).
Orion Fund JV and Red Eagle have also entered into a credit agreement, making USD$60 million of construction and development financing available to Red Eagle (the "Credit Agreement"). Pursuant to the Credit Agreement, Orion Fund JV will be issued 5 million non-transferable bonus warrants, each exercisable for one Common Share (the "Warrants"), upon the closing of the additional USD$15 million in equity financing required to be raised by Red Eagle under the terms of the Credit Agreement. The Warrants will be exercisable for a five year term and will have an exercise price determined in the context of the USD$15 million equity financing. The Warrants will not be exercisable until such time as all significant conditions precedent to the first advance under the Credit Agreement have been satisfied, and will not be exercisable at any time if such exercise would result in Orion owning more than 19.99% of the Common Shares.
Orion currently owns, or exercises control or direction over, 3,831,515 Common Shares representing approximately 4.9% of the currently outstanding Common Shares. Together with the Offered Shares, and assuming a USD:CAD exchange rate of 0.80:1.00, Orion would own, or exercise control or direction over, 18,471,515 Common Shares representing approximately 19.99% of the outstanding Common Shares upon completion of the transaction (not taking into account the issue or exercise of any of the Warrants).
Orion is acquiring the Common Shares for investment purposes. Except as otherwise stated herein, Orion has no current plan or proposal which relates to, or would result in, acquiring additional ownership or control over the securities of Red Eagle. Depending on market conditions, Orion's view of Red Eagle's prospects and other factors considered relevant by Orion, Orion may acquire additional securities of Red Eagle from time to time in the future, in the open market or pursuant to privately negotiated transactions, or may sell all or a portion of its securities of Red Eagle.
Orion's address is Canon's Court, 22 Victoria Street, Hamilton, Bermuda HM12.
Certain statements in the press release are forward-looking statements and are prospective in nature, including statements with respect to Orion's future intentions regarding the securities of Red Eagle. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Such forward-looking statements should therefore be construed in light of such factors, and Orion is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
SOURCE Orion Mine Finance Management I Limited
For further information: please refer to the Early Warning Report posted on SEDAR or contact Limor Nissan at (212) 596-3469