Elgin Mining Inc. ("Elgin Mining" or the "Company") (TSX: ELG and ELG.WT) is pleased to announce that, further to its news release of August 27, 2013, it has completed the bridge loan credit facility (the "Facility") with Sprott Resource Lending Partnership (the "Lender").
The Facility is for the principal amount of $5 million at an interest rate of 10 percent per annum, compounded and payable monthly. The term of the Facility is eighteen months, at which time the Facility will be due and payable in full. In consideration for the advance of the Facility, the Company has made a bonus payment in cash to the Lender in the amount of $350,000, being 7% of principal amount. In consideration for the structuring and syndication of the Facility, the Company has paid to the Lender a cash structuring fee of $50,000. The proceeds of the Facility will provide the Company with additional liquidity to continue development of the Company's Bjorkdal Mine in Sweden and to fund working capital and general and administrative costs.
As a result of the fact that the Lender is an affiliate of an insider of the Company and that a director of the Company will participate in the syndication of the Facility, the Facility is considered a "related party transaction" pursuant to Multilateral Instrument 61-101 -- Protection of Minority Securityholders in Special Transactions ("MI 61-101"). The transaction is exempt from the requirements to obtain a formal valuation, pursuant to Section 5.5(a) of MI 61-101, and minority shareholder approval, pursuant to Section 5.7(a) of MI 61-101, as the fair market value of the Facility and any consideration paid by the Company in connection with it, will not exceed 25% of the Company's market capitalization.
The Facility was considered and approved by the board of directors of the Company, other than the director who will participate on syndication of the Facility and who abstained from such approval.
Elgin Mining Inc.
Elgin Mining is a Canadian based company focused on production at the Björkdal gold mine in Sweden. In addition, Elgin Mining's portfolio includes the Lupin and Ulu gold projects located in Nunavut, Canada.
For further information, please visit the Company's web site at