donner
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Mar 14, 2013 09:08AM
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Donner Metals Announces Financial Support from Quebec Institutions (ccnm)
MONTREAL, QUÉBEC--(Marketwire - March 14, 2013) - Donner Metals Ltd. (TSX VENTURE:DON)(FRANKFURT:D4M) ("Donner" or the "Company") announces the closing of a loan for a total amount of $6,000,000 with Québec institutions (the "Lenders"). The proceeds from the loan will be used for working capital in connection with the operations of the Bracemac-McLeod Mine.
The amount of the loan extended by the Lenders consists of the following:
The loan is for a term of three (3) years and bears interest at a rate of 14% per annum, computed daily on the balance of the loan at the end of each day until it is fully repaid. Interest is payable monthly. The principal of the loan is repayable to the Lenders in 30 equal monthly instalments starting as of the 7th month following the closing date.
As collateral for the repayment of the loan, Donner has granted a hypothec to Ressources Québec Inc. in the amount of six million dollars on the universality of its property, except for property that is already covered by a conventional hypothec granted to Xstrata Canada Corporation - Xstrata Zinc Canada Division and except for some of its assets that may not be hypothecated or given as collateral in accordance with the terms of agreements entered into by Donner.
In connection with the loan, Donner has issued 5,625,000 common shares at a deemed price of $0.16 per share to the Lenders in proportion to the respective amounts extended by each, equivalent to 15% of the total amount of the loan. In accordance with applicable securities legislation and the policies of the TSX Venture Exchange, all the foregoing shares have a hold period expiring on July 14, 2013. As a result of the issuance of such shares, 255,280,993 common shares of Donner are issued and outstanding. Haywood Securities Inc. acted as an advisor to Donner on the transaction.
"We are proud to support Donner Metals in its operations. Investissement Québec, through its subsidiary Ressources Québec, is contributing, thanks to this financing, to the development of natural resources," said Jacques Daoust, President and Chief Executive Officer of Investissement Québec.
"We are pleased with the support from the Québec institutions, which will provide us with advantageous additional financial flexibility to meet our commitments regarding the start-up of operations at the Bracemac McLeod Mine site," stated Normand Champigny, President and Chief Financial Officer of Donner.
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