TORONTO, Dec. 3 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, MND.WT) announced today that it has signed a term sheet with Sprott Asset Management L.P., on behalf of certain funds, for a non-brokered private placement of 10 million shares of the Company priced at $0.32 per share. Total gross proceeds of the placement will be $3.2 million.
Mandalay has also executed a term sheet with Sprott Lending Resource Partnership ("Sprott LRP") in respect of a two year debt facility totaling $10 million at an interest rate of 11% per annum. The term sheet contemplates that Sprott LRP will make an initial advance of $5 million to Mandalay at closing, with an additional $5 million advanced upon Sprott LRP receiving perfected security interests in Mandalay's Cerro Bayo mine in Chile. Upon closing, Mandalay will issue 1,885,938 common shares to Sprott LRP as partial compensation for the advance of the facility.
Closing of each of these transactions is conditional upon the satisfaction of customary conditions, including approval of the Toronto Stock Exchange, satisfactory completion of due diligence by Sprott and execution of definitive agreements. Both transactions are expected to close in December 2010.
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.
This news release contains "forward-looking statements" within the meaning of applicable securities laws. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, Mandalay's ability to complete the transactions described herein on the terms outlined, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
For further information: For further information:
Chief Executive Officer
Company website: www.mandalayresources.com