RE: RE: FinancingWell,
Marketwire has it too....
SilverCrest Announces Agreement WithMacquarie Bank Limited for US$12.5 Million Project Loan, HedgingFacilities and Bridge Loan for Santa Elena Project
VANCOUVER, BRITISHCOLUMBIA--(Marketwire - June 8, 2009) - SilverCrest Mines Inc. (the"Company") (TSX VENTURE:SVL) is pleased to announce it has reachedagreement with Macquarie Bank Ltd. on a US$12.5 million debt facilityto finance the development of its Santa Elena Project in Sonora, Mexico.
J. Scott Drever, President stated; "These financial arrangementswith Macquarie Bank are extremely important to our plans for thedevelopment of the Santa Elena gold and silver project in Mexico. Thefunds will enable us to finalize the acquisition of 100% interest inthe project and will provide sufficient funds, in conjunction with theUS$12 million from our gold purchase agreement with SandstormResources, to complete the construction and development of the open pitheap leach operation that has been designed and engineered for SantaElena. The hedging program assures that we can achieve our projectedprofit margins while the debt is outstanding but still leaves asubstantial portion of our gold production and all of our silverproduction unencumbered. The addition of a debt component to thefinancing package enables us to keep the potential share dilution ofthe Company to a reasonable level. This will obviously be to thebenefit of current shareholder values once cash flow from operationscommences in 2010."
The general terms and conditions of the debt and hedging facilities are as follows:
US$12.5 Million Project Loan and Hedging Facilities
The Company has accepted a letter of offer dated June 5, 2009 fromMacquarie Bank Limited ("Macquarie") for a US$12.5 million project loanfacility (the "Project Loan") and associated hedging facilities (the"Hedging Facility") to partially fund the cost of development of theCompany's Santa Elena Gold Project in Mexico.
The Project Loan will be made to the Company's wholly-owned Mexicansubsidiary, Nusantara de Mexico S.A. de C.V. (the "Borrower"), willbear interest at the U.S. dollar LIBOR rate plus 6.0% per annum beforerepayment of 50% of the Project Loan and 5.5% after repayment of 50% ofthe Project Loan. The Project Loan shall be repaid in full on or beforeMarch 31, 2013 pursuant to an amortization schedule. Security for theProject Loan will include a general security agreement and guaranteesfrom the Company. Drawdowns under the Project Loan will be subject tothe terms and conditions of a definitive Project Loan agreement to beentered into, including various due diligence conditions and othercustomary lending conditions.
In consideration for the provision of the Project Loan, the Companyhas agreed to pay Macquarie certain fees customary for such a facilityand to issue five (5) million common share purchase warrants, eachwarrant exercisable to purchase one common share of the Company for aperiod of three years at a price of Cdn$0.90 per share. The warrantsare subject to TSX Venture Exchange approval. In addition, Macquariehas agreed to cancellation of its existing outstanding warrantsexercisable for a total of 3,216,782 shares.
The Hedging Facility will be established between the Borrower andMacquarie to cover of 55,000 ounces of gold production over the firstthree years of production. All hedging will be done through Macquarieand executed under non-margin facilities on agreed market terms.
Bridge Finance Facility
The Company has also accepted a letter of offer dated June 5, 2009from Macquarie for a Cdn$3.0 million Bridge Finance Facility topartially fund the cost of the Borrower completing payment of theacquisition cost of the Santa Elena Gold Project. The Bridge FinanceFacility is made in connection with the Project Loan and is to berepaid from the first drawdown of the Project Loan or the date that issix months from execution of the Bridge Finance Facility Agreement. TheBridge Finance Facility Agreement will bear interest at the Cdn dollarLIBOR rate plus 7.5% per annum.
In consideration for the provision of the Bridge Finance Facility,the Company has agreed to pay Macquarie certain fees customary for suchfacility and the Borrower will grant to Macquarie a "European" goldcall option for 5,000 ounces of gold at a strike price at the higher ofUS$1,000 per ounce and the spot gold price on the date upon which allconditions precedent to the first drawdown of the Bridge FinanceFacility are met, with an option expiry date of 36 months.
The feasibility finance facility of US$3.0 million arranged withMacquarie in 2008 and which is currently outstanding will be repaidfrom the proceeds of the Project Loan.