APP.V Seems interesting. $10-million (U.S.) loan financing
www.ressourcesappalachestv.com
2013-05-08 09:07 ET - News Release
Mr. Alain Hupe reports
RESSOURCES APPALACHES INC.: US $10 M LOAN FINANCING SECURED FOR GOLD PRODUCTION AT DUFFERIN MINE
Appalaches Resources Inc. has closed its previously announced loan financing of $10-million (U.S.) provided by New York-based Lascaux Resource Capital Partners LLC. A first tranche ("Tranche A") of US $2.5 M, less fees and expenses, was advanced to the Company at Closing and the second tranche ("Tranche B") of US $7.5 M will be advanced upon certain specific conditions being satisfied, namely an updated technical report of the Dufferin Mine including the detailed mine plan and obtaining the remaining production approval with respect thereto within the next 9 months.
Path to Production
The loan financing of US $10 M will provide sufficient funds to complete the refurbishment of the Dufferin Mine and advance the project to gold production. Start of commissioning is projected for 4 months after the funding of Tranche B, with another 4 months of mining & milling ramp-up operations.
The targeted first stage of production stands at 300 tonnes per day (TPD). This targeted output was reviewed by MineTech International as part of the financing due diligence process and is subject to the finalization of the mine plan. A NI 43-101 compliant feasibility study has not been completed and there is no certainty the proposed operation will be economically viable.
Financing Details
The financing of US $10 M, is being made through an Ontario limited partnership (the "Ontario LP"). The financing will bear interest at a rate of 8% per annum starting the 9th month after Tranche B is advanced and is payable in cash. The financing is amortized by the delivery of a total of 10,125 ounces of gold over a period of 27 months starting the 9th month following the advance of Tranche B. Prepaid interest of US $800,000 and structuring fees of US $300,000 are also payable upon the advance of Tranche B.
In consideration for the financing, the Company issued 1,000,000 shares to the Ontario LP at Closing and will issue an additional 3,500,000 shares to the Ontario LP upon the advance of Tranche B.
The financing, which is secured by the Company's assets, will be used to resume gold production at the Dufferin Mine project in Nova Scotia (see press releases of November 28, 2012 and March 4, 2013).
The Company has entered into an off-take agreement with the Ontario LP for all production from the Dufferin Mine on market based pricing. The Company will have the option to buy back the off-take for US $2 M one year after the fulfillment of the 10,125 ounces of gold deliveries.
Axiom Capital Management Inc. a broker-dealer based in New York, is receiving a finder's fee consisting of 2,000,000 shares of the Company at closing, 3,000,000 shares upon the advance of Tranche B and cash equal to 5% of the amount advanced under the Loan.
