Kerr Mines arranges $27.6MKerr Mines arranges $27.6M (U.S.) financing 2018-07-18 07:26 ET - News Release
Mr. Claudio Ciavarella reports
KERR MINES ANNOUNCES US$27.6 MILLION PROJECT FINANCING AND MAKES POSITIVE PRODUCTION DECISION
Kerr Mines Inc. has signed a letter of intent with Pandion Mine Finance LLC for $27.6-million (U.S.) to finance the development and production of gold at the Copperstone mine by the fourth quarter of 2019.
The financing is subject to the execution of a Prepaid Forward Gold Agreement (the "Agreement"), with an anticipated initial tranche of US$19.6 million targeted for August 2018 and a second tranche of US$8 million in July 2019. Pandion anticipates signing a Definitive Agreement in August 2018.
The proceeds of the Agreement will be primarily used to fund the Copperstone Mine into production by Q4 2019. In addition, the Company will commence the 2018 drilling program designed to convert a significant proportion of Measured, Indicated and Inferred Resource into Proven and Probable that will extend the mine life and cash flows.
"After careful review of the financing options available, we are pleased to select Pandion Mine Finance as our funding partner", stated Claudio Ciavarella, CEO Kerr Mines Inc "We believe the terms of this financing are competitive and create value for our shareholders. It is another key milestone that our team has achieved in just over a year since taking the helm of the Company. With this funding arrangement now in place, we are highly focused on continuing to create shareholder value and are now able to turn our attention to achieving our next targets {A –} production in 2019, expansion of resources and mine life " continued Ciavarella.
The highlights of the Agreement are:
US$27.6 million financing in two tranches, US$19.6 million in August 2018 and US$8 million in July 2019 The Company will deliver to Pandion a total of approximately 95,000 ounces over a 40 month period. However, no gold shall be deliverable by the Company during the first 22 months. Pandion will pay the Company the market price of delivered gold less a specified discount per ounce. In addition, Pandion will participate in a portion of any increase in the price of gold. All other production from the Copperstone will be sold at the market price. Additionally, Pandion would have the option to elect at any time to receive common shares of Kerr Mines Inc., at a price of $0.40 per share, in lieu of delivery of up to 10,000 ounces of gold, subject to the prior approval of the TSX. Kerr will retain the right to buy out and terminate the Agreement at any time
About Pandion Mine Finance, LP
Pandion is a mining-focused investment firm backed by MKS PAMP Group and Ospraie Management, LLC that provides flexible financing solutions to developing mining companies.
About Kerr Mines Inc.
Kerr Mines is an Emerging American Gold Producer currently advancing the 100% owned, fully permitted past-producing Copperstone Mine project to production. Copperstone is a high-grade gold project located along a detachment fault mineral belt in mining-friendly Arizona. This gold project in Arizona demonstrates tremendous exploration potential targeting multi-million ounce prospects within a 4,775 hectare (11,800 acres) land package.