Resource Capital Fund V L.P. Acquires Additional Shares of Buffalo Coal Corp.

DENVER, CO, Jan. 15, 2016 /CNW/ - Resource Capital Fund V L.P. ("RCF") reports that on January 14, 2016, in connection with a previously announced secured convertible loan facility advanced to Buffalo Coal Corp. ("Buffalo") in the aggregate principal amount of US$27 million (the "Facility"), and in satisfaction of interest and principal payment obligations under the Facility, RCF acquired ownership of 14,990,400 additional common shares ("Facility Shares") in the capital of Buffalo.

On December 3, 2015, RCF announced that it had agreed with Buffalo to, among other things, convert US$20 million of the Facility into common shares in the capital of Buffalo (the "Common Shares") over a two year period at the agreed conversion price of C$0.0469 per Common Share, subject to a minimum conversion of US$10 million within the first year. In addition, an initial amount of US$2 million was converted into Common Shares on December 3, 2015, reducing the principal amount of the Facility from US$29 million to US$27 million.

Prior to the conversion of the US$20 million, interest will be settled through the issuance of Common Shares, priced at the 20 day volume weighted average price ("VWAP"). Following the date of the conversion of the US$20 million, interest will be payable in cash subject to Buffalo Coal Dundee Proprietary Limited ("Buffalo Dundee"), a wholly owned subsidiary of Buffalo, having paid Investec Bank Limited ("Investec") its scheduled principal repayment for the prior quarter. If Investec's principal repayment has not been made, RCF's interest will accrue until such time as Investec has been paid, subject to RCF's election for interest to be settled through the issuance of Common Shares.

The percentage interest rate on the Facility will be determined as follows:

  • if the 20 day VWAP is greater than C$0.05 per Common Share then the interest rate will be 15% per annum;
  • if the 20 day VWAP is less than or equal to C$0.0313 per Common Share then the interest rate will be 24% per annum; and
  • if the 20 day VWAP is greater than C$0.0313 but less than C$0.05 per Common Share then the interest rate will be calculated as being between 15% and 24% per annum.

The conversion price for the interest is calculated based on the 20-day VWAP of the Common Shares on the TSX Venture Exchange, subject to a minimum conversion price of C$0.05 per Common Share.

The Facility Shares collectively represent 5.07% of the issued and outstanding Common Shares. As of the close of business today, RCF owns in the aggregate, a total of 264,025,857 Common Shares, representing approximately 89.28% of the issued and outstanding Common Shares. Prior to acquiring the Facility Shares, RCF owned 249,035,457 Common Shares, or approximately 88.71% of the issued and outstanding Common Shares.

RCF acquired the Facility Shares for investment purposes. Depending on market conditions and other factors, including additional future conversions of interest payments under the Facility or the exercise of previously issued convertible securities, RCF may from time to time acquire additional securities of Buffalo or dispose of securities of Buffalo in the open market, by private agreement, or otherwise.

SOURCE Resource Capital Fund V L.P.

For further information: Resource Capital Fund V L.P, 1400 Sixteenth Street, Suite 200, Denver, CO, 80202, Telephone: (720) 946-1444


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