TORONTO, April 30, 2012 /CNW/ - Cline Mining Corporation ("Cline" or the "Company") (TSX:CMK) is pleased to announce that it has today issued a second round of certain senior secured bonds having a principal amount of US$25 million (the "Bonds"). This Bond issuance is made in connection with the Company's previously announced debt financing whereby the Company entered into a trust indenture (the "Trust Indenture") with Marret Asset Management Inc. ("Marret") and Computershare Trust Company of Canada as trustee for certain investment funds advised by Marret (the "Lenders").
The Bonds issued today will mature on February 27, 2014 and will bear a coupon of 10% per annum, payable semi-annually in arrears in equal instalments.
In consideration for the Company being permitted to draw down on the commitment of the Lenders to take up the Bonds, the Company issued 1.25 million common share purchase warrants (the "Second Draw Warrants") to such Lenders. The Second Draw Warrants are exercisable at a price of C$2.49 and will expire on April 30, 2015.
Ken Bates, the President and CEO of the Company, commented "This Bond issuance will assist Cline in meeting its ongoing targeted production rates and important expansions at the New Elk mine in addition to providing funds for capital improvements."
In consideration for the waiver of certain provisions of the Trust Indenture, the Company also entered into a supplemental trust indenture on the date hereof which requires the Company to cancel all previously issued warrants (including the Second Draw Warrants) and to issue new warrants on certain revised terms to the holders thereof. To effect the foregoing, the Company intends on entering into a new warrant indenture with CIBC Mellon Trust Company (the "New Warrant Indenture") pursuant to which 10,000,000 common share purchase warrants (the "Warrants") will be issued on the terms described below.
Following the execution and delivery of the New Warrant Indenture and the issuance of the Warrants, the Company intends to terminate the existing warrant indenture dated October 14, 2011 (the "Original Warrant Indenture") entered into with CIBC Mellon Trust Company. Pursuant to the Original Warrant Indenture, 10,000,000 warrants have been issued by the Company to certain arm's length holders on the following basis: 7,500,000 warrants were issued at an exercise price of C$1.75 per common share expiring on September 30, 2014, 1,250,000 warrants were issued at an exercise price of C$2.49 per common share expiring on February 27, 2015 and today, 1,250,000 warrants were issued at an exercise price of C$2.49 per common share expiring on April 30, 2015. These 10,000,000 warrants will be cancelled and the Warrants will be issued pursuant to the New Warrant Indenture at an exercise price of C$1.15 per common share and will expire on the date that is 3 years from their date of issue.
The effective date of the Warrants will be on or after May 14, 2012, subject to receipt of TSX approval. The holders of the Warrants will continue to be at arm's length to the Company.
GMP Securities L.P. acted as financial advisor to the Company in connection with the issuance of the Bonds.
About Cline: Cline has significant metallurgical coal property interests in North America with NI 43-101 compliant independent Technical Reports. Cline Mining Corporation is a mine development company focused on the exploration and development of metallurgical steel making coals in North America, iron ore in Madagascar and the Cline Lake Gold Mine Property in northern Ontario, Canada.
CLINE MINING CORPORATION
Ken Bates, President and Chief Executive Officer
This news release may contain forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995) relating to, among other things, the Company's future intention to draw down on the Commitment and the future operations of the Company's New Elk coal mine. Information concerning mineral reserve and resource estimates may also be deemed to be forward-looking information in that it reflects a prediction of the mineralization that would be encountered if a mineral deposit were developed and mined. Such statements are based on assumptions, estimates, forecasts and projections made in light of the trends, conditions and expected developments that are considered to be relevant and reasonable in the circumstances at the date that such statements are made. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. A number of factors and assumptions may cause actual results, level of activity, performance or outcomes of the Company to be materially different from those expressed or implied by such forward-looking statements including the operational forecasts for the New Elk coal mine. More detailed risks are set forth in other public filings of the Company which may be accessed on the Company's profile page at www.sedar.com. Consequently, undue reliance should not be placed on such forward-looking statements. In addition, all forward-looking statements in this news release are given as of the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.
Head office: Brookfield Place, 181 Bay Street, 3rd Floor, Clarkson Gordon Heritage Building, Toronto, ON, M5J 2T3
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