Orvana expects to close Copperwood sale June 13

2014-05-29 18:26 ET - News Release

Mr. Michael Winship reports

ORVANA PROVIDES UPDATE ON CLOSING OF COPPERWOOD SALE TO HIGHLAND COPPER

Orvana Minerals Corp. expects to close the sale of its Copperwood project to Highland Copper Company Inc. through the sale of all of the outstanding shares of Orvana Resources U.S. Corp. on or before June 13, 2014.

As previously disclosed, in consideration for its acquisition of the shares of Orvana U.S., Highland has agreed to pay Orvana up to $25-million (U.S.) in aggregate, consisting of a base consideration of $20-million (U.S.) and additional consideration of up to $5.0-million (U.S.).

Concurrent with the announcement by Highland of a letter of intent with AMCI Holdings Inc. with respect to, among other things, the establishment of a joint venture between Highland and AMCI to include Copperwood, after its acquisition by Highland, Orvana and Highland have now agreed that the $20-million (U.S.) base consideration, previously agreed to be paid in cash upon closing, will be paid in two tranches as follows:

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• The note will bear interest at an annualized rate of 13.5 per cent on the outstanding amount from issuance of the note until Sept. 30, 2014, and thereafter at an annualized rate of 17.5 per cent.
• The principal amount outstanding under the note, and the interest accrued thereon, may be prepaid at any time and is repayable no later than Dec. 15, 2014, subject to the mandatory prepayments described in subparagraphs (iii) and (iv).
• The note will include mandatory prepayments of:

• Orvana will use the proceeds received from the sale of Copperwood to repay a loan from Fabulosa Mines Ltd. and for working capital purposes.