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Message: Quadra Mining Ltd. and Centenario Copper Corporation Agree to Terms for Interim
| March 26, 2009 |
| Quadra Mining Ltd. and Centenario Copper Corporation Agree to Terms for Interim Financing and Announce Plans for the Franke Mine |
| VANCOUVER, BRITISH COLUMBIA and TORONTO, ONTARIO--(Marketwire - March 26, 2009) - Quadra Mining Ltd. ("Quadra" or the "Company") (TSX:QUA) and Centenario Copper Corporation ("Centenario") (TSX:CCT) are pleased to announce they have settled the terms of a convertible loan agreement to provide interim financing of up to US$12.5 million to assist Centenario with funding requirements for the completion of the Franke Mine construction. Key details are: - Available for drawdown until the completion or termination of the Arrangement Agreement - Principal and interest convertible at Quadra's option into common shares of Centenario at a conversion price of Cdn$1.03 per share but subject to Quadra not exceeding a 20% shareholding in Centenario - The loan will bear interest at LIBOR plus 4.75% - The loan will be unsecured until there is a refinancing of Centenario's current debt facilities - The loan will be subject to settlement and execution of definitive loan documentation and: - Approval by the Toronto Stock Exchange - Centenario entering into appropriate documentation with its existing lenders and obtaining a waiver from the existing lenders to Quadra's satisfaction The interim financing arrangements were re-negotiated by the parties as a result of the limited availability of senior debt financing. The original pre-closing US$3.5 million loan and US$6.5 million private placement contemplated in the Arrangement Agreement will be replaced by the convertible loan described above. With this interim funding in place, Centenario is able to continue the work necessary to move the Franke Mine towards completion of construction and commence commissioning and ramp-up, pending completion of the proposed acquisition of Centenario by Quadra. At December 31, 2008, Centenario had approximately US$60 million of obligations to the construction and operations contractors as well as other trade payables. Quadra estimates that an additional US$30 million will be required to complete the development and bring the Franke Project to a cash flow positive position. In addition, Quadra estimates that based on a $1.75 copper price the cost of retiring Centenario's senior debt (net of hedge proceeds and cash on hand) is approximately US$ 20 million. Assuming that the acquisition is completed, these funding requirements will be met by Quadra's previously announced equity financing and new loan arrangements. There are a number of core activities required for production to commence which have been delayed by the project funding issues, including opening up of mining areas and building up the leach pad inventory, as well as testing and commissioning. Quadra expects first production to be delayed from Centenario's original plan. Paul Blythe, President and CEO of Quadra says, "The original interim financing arrangement was conditional upon achieving satisfactory restructuring of Centenario's existing loan facilities. Now that we have in place alternative financing and more clarity with respect to overall funding requirements, we are comfortable advancing these interim funds which will allow progress to continue at the Franke Mine and in particular, for mining to commence." About Quadra: Quadra Mining Ltd. is a Vancouver based copper mining company. Quadra was launched as a public company in 2004 with a business plan of becoming a mid-tier base metals development and operating company. Quadra's strategic plan is to grow by acquiring assets, accessing and developing attractive projects held by exploration focused companies and seeking merger opportunities within the small to mid-tier sector. The plan was launched with the acquisition and restart of the Robinson Mine ("Robinson") in Nevada in 2004 and has continued with the purchase and construction of its second producing asset, the Carlota Mine ("Carlota") in Arizona. Robinson produced a record 159.7 million pounds of copper and 137,628 ounces of gold in concentrate during 2008. Quadra also owns Sierra Gorda, an advanced and potentially world class development copper project in Region II, Chile. |
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