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Message: Core Gold announces $15 million debt facility and additional private placemnt
Core Gold Announces Proposed US$15,000,000 Debt Facility and $1,300,000 Private Placement
December 1st, 2017
Vancouver, B.C., December 1, 2017 – Core Gold Inc. (“Core Gold” or the “Company”) (TSXV: CGLD, OTCQX: CGLDF) is pleased to announce it has signed a term sheet with Investa Bank S.A (“Investa”) to arrange a debt facility for up to US$15,000,000. Core Gold’s current loan outstanding to Vertex may be restructured into the Investa Facility.
In addition, Company intends to conduct an offering, on a non-brokered private placement basis, of up to 4,333,334 units of the Company at a subscription price of $0.30 per Unit for aggregate gross proceeds of up to $1,300,000.
US$15 Million Investa Facility
The Company is pleased to announce that it has signed a term sheet with Investa to arrange a debt facility for up to US$15,000,000 (the “Investa Facility”). The Company is currently in discussion with Vertex Managed Value Portfolio and Vertex Enhanced Income Fund (together as “Vertex”) to restructure the current loans outstanding to Vertex into the Investa Facility. The Investa Facility is expected to include the following key terms:
| Borrower | The Company |
| Guarantors | Any subsidiary of the Company with direct or indirect ownership of the following projects: Dynasty Copper-Gold Belt Mining Projects, Zaruma Gold Project, Jerusalem Gold Project and Portovelo Plant located in Portovelo, Del Oro Province (jointly; “Projects”), all located in Ecuador. |
| Facility amount | US$15,000,000 |
| Lender | Investa and/or any other lenders introduced by Investa |
| Interest rate | 12% per annum, payable quarterly |
| Security | First ranking security over the assets, property and undertaking of the Company and the Guarantors, |
| Arrangement fee | 2% of the Facility amount |
| Agent warrants | One (1) Warrant per every $2 arranged, issued without cost to Investa (“Agent Warrants”) at closing, with an exercise price of CAD$0.50/share. If the trading price per share exceeds CAD$1.00/share for over 10 consecutive trading days (the “Trigger”), the Company has the right to accelerate on 50% of the Warrants issued from the original four expiry dates below to 30 calendar days from the day of the Trigger (“Acceleration Clause”). The remaining 50% of the Agent Warrants will not have any restrictions. The following table is the expiration date of the Agent Warrants: 25% of warrants – 27th month after closing 25% of warrants – 30th month after closing 25% of warrants – 33rd month after closing 25% of warrants – 36th month after closing |
| Commitment fee | 2% per annum on available but undrawn balance of the Facility amount, payable quarterly. |
| Drawing period | Available for drawing through July 31, 2019 |
| Repayment schedule | 25% of amount outstanding – 27th month after closing 25% of amount outstanding – 30th month after closing 25% of amount outstanding – 33rd month after closing 25% of amount outstanding – 36th month after closing |
| Mandatory prepayment | Mandatory prepayments are to be made as follows:
|
| Financier share purchase warrants | (One) 1 Warrant per every $2 arranged, issued without cost to Lenders (“Financier Warrants”) at closing. The terms of the Financier Warrants will be the same as Agent Warrants. |
| Conditions precedent to Closing | Conditions precedent will include payment of the Arrangement fee, completion of satisfactory technical, financial, commercial, environmental and legal due diligence, all necessary regulatory approvals, including the approval of the TSX Venture Exchange (“TSXV”), satisfactory arrangements for environmental bonds and guarantees for Projects, budgets, security and insurance as well as usual conditions for closing of a debt facility of this nature.
In addition, any offer of finance will be subject to the approval of the Investment Committee of Investa and the Lenders. |
| Closing date | Expected to be on or before March 31, 2018 subject to satisfaction of the conditions precedent described above. |
The Company is proposing to use the Investa Facility proceeds as follows:
| Amount ($) | Use of Proceeds |
| $500,000 | Arrangement fee and other professional fees to complete the financing. |
| $4,000,000 | Portovelo Plant expansion to increase capacity from 750 tons per day to 2,000 tons per day. |
| Up to $4,500,000 | Restructure of Vertex’s outstanding loan |
| $6,000,000 | Corporate development initiatives and general working capital including exploration. |
Private placement - $1.3 million
The Company announces that it intends to conduct an offering, on a non-brokered private placement basis, of up to 4,333,334 units of the Company (the “Units”) at a subscription price of $0.30 per Unit for aggregate gross proceeds of up to $1,300,000 (the “Private Placement”). Each Unit will consist of one common share of the Company (each, a “Common Share”) and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a “Warrant”). Each Warrant will entitle the holder to purchase one Common Share at a price of $0.45 for a period of two (2) years following the closing of the Private Placement, subject to acceleration in the event that the closing price of the Company’s Common Shares is $0.60 per share or higher over a period of 10 consecutive trading days. All securities issued pursuant to the Private Placement will be subject to a hold period that expires four months and a day from the closing date in accordance with the rules and policies of the TSXV and applicable Canadian securities laws.
The Company intends to use the net proceeds of the Private Placement for general corporate purposes and working capital between now and closing of the Facility.
Upon closing of the Private Placement, the Company may pay a cash finder’s fee to one or more arm’s length parties equal to 7% of the aggregate gross proceeds raised under the Private Placement from subscribers introduced by such parties. The Private Placement is expected to close on or about December 29, 2017 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSXV.
This press release shall not constitute an offer to sell or solicitation of an offer to buy the securities in any jurisdiction. The securities will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements.
Keith Piggott, President and Chief Executive Officer of Core Gold commented: “With the Investa debt facility in place, the Company will be well positioned to continue expanding gold production in 2018 and to devote material capital to high-impact exploration activities throughout its Dynasty District copper-gold belt concession holdings.”
About Core Gold Inc.
The Company is a Canadian based mining company involved in the mining, exploration and development of mineral properties in Ecuador. The Company is currently focused on gold production at its wholly-owned Dynasty Goldfield project and continued development at its Zaruma mine. Mineral is treated at the Company’s wholly-owned treatment plant close to the Zaruma mine operations. The Company also owns other significant gold exploration projects including the Jerusalem Project (located 30 kilometers south of the Fruta del Norte project), the Copper Duke area and the Linderos area in southern Ecuador.
For further information please contact:
Keith Piggott, CEO
Suite 1201 – 1166 Alberni Street
Vancouver, B.C. V6E 3Z3
Phone: +1 (604) 345-4822
Email: info@coregoldinc.com
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