RE:RE:RE:RE:What's Up?MAybe not over ...
Augusta Arranges US$26 Million Increase to Red Kite Loan Facility (cnw)
TORONTO, Nov. 20, 2013 /CNW/ - Augusta Resource Corporation (TSX: AZC) (NYSE MKT: AZC) ("Augusta" or "Company") is pleased to announce that the Company and RK Mine Finance Trust I ("Red Kite") have signed a term sheet for a US$26,000,000 increase ("Additional Commitment") to the existing US$83,000,000 Red Kite loan ("Existing Loan"). The Additional Commitment and the Existing Loan, together totalling US$109,000,000, are referred to as the Expanded Loan.
"Red Kite continues to show their strong support of Augusta," Gil Clausen, Augusta's President and CEO comments. "This additional funding demonstrates their confidence in the Rosemont Copper Project and comfortably sees us through our last stages of permitting, allowing us to advance toward a construction decision, which is expected in the first half of next year."
The Additional Commitment will be separated into four tranches: The first tranche of US$3.5 million will be available for draw down upon completion and signing of final documentation. The second tranche of US$10 million will be available for draw down upon publication of Rosemont's final Environmental Impact Statement (EIS) and draft Record of Decision (ROD) by the U.S. Forest Service (USFS). The final EIS is expected to be published in November 2013, with the printed final EIS and draft ROD to be issued by mid-December 2013. The third tranche of US$7.5 million will be available for draw down upon publication of Rosemont's final ROD by the USFS. The fourth tranche of US$5 million will be available for draw down upon issuance of the final Clean Water Action Section 404 Permit by the Army Corps of Engineers.
The terms for the Expanded Loan are substantially similar to the Existing Loan, including interest payable at LIBOR plus 4.50%, except the Company has the option to extend the maturity date of the entire loan amount by up to three months to no later than October 21, 2014 for an extension fee.
In connection with the Expanded Loan, Augusta will pay an arrangement fee of 2% of the Additional Commitment and issue a total of 3.3 million common share purchase warrants ("Warrants") to Red Kite at a price of US$2.12 per share subject to amendment if certain conditions are not met. The Warrants will expire on December 2, 2016.
No additional concentrate commitments are connected to the Additional Commitment. 30% of Augusta's concentrate remains uncommitted.
Closing of the Expanded Loan transaction is subject to customary legal due diligence for these types of loan transactions, all regulatory approvals and final definitive documentation.