News InTamerlane Signs TermSheet for US$10.0 Million Senior Secured Bridge Loan and Stand-byFacility to Advance its Pine Point Project
BELLINGHAM, WASHINGTON, Nov 9, 2010 (Marketwire via COMTEX News Network) --
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Tamerlane VenturesInc. ("Tamerlane" or the "Company") (TSX VENTURE:TAM) announces that ithas signed a term sheet for a US$5.0 million senior secured bridge loanand an additional stand-by facility for up to US$5.0 million arrangedby Renvest Mercantile Bancorp Inc. through its Global Resource Fund.
TheCompany has arranged these financings to fund various near-termexpenditures at the Pine Point lead-zinc project in the NorthwestTerritories while it completes arranging the production financing toplace the project into production.
The bridge loan will be usedto fund definitive engineering expenditures on the Pine Point project,cash deposits on certain long lead-time orders, and for working capital.The stand-by facility will be used to fund acquisitions.
TheCompany will pay an upfront fee on the initial US$5.0 million bridgeloan of US$125,000 in cash and 500,000 common shares of Tamerlane. Theloan will be secured primarily by the Pine Point project. Interest onthe bridge loan shall be at a fixed rate of 12.5% per annum. The bridgeloan may be repaid by the Company in whole or in part at any time. Inthe case of an early repayment within the first 6 months from theclosing date, the Company will pay the lender a prepayment penalty equalto 3 months of interest in proportion to the amount of the earlyrepayment. No penalty will be applicable if the repayment is made after 6months from the closing date.
The stand-by facility will carry adrawdown fee of 2.5% in cash and up to 500,000 shares of Tamerlane paidon the date of drawdown of the stand-by facility. The actual amount ofcash and number of shares payable shall be pro-rated according to thegross amount actually drawn down under the stand-by facility. Thestand-by facility has a fee payable of 25 basis points per month on anyundrawn balance.
US$1.25 million from the initial bridge loan andthe first US$1.25 million from the stand-by facility (if drawn down)shall be in the form of a convertible debenture, with a conversion priceper share of C
.40. The Company shall have the right to forceconversion of the convertible debenture if and when the price per commonshare has traded at a minimum of C
.90 for 30 consecutive days on avolume weighted average basis.
In conjunction with the initialbridge loan, any and all amounts drawn down under the stand-by facilityshall become part of the senior secured bridge loan, which shall befully due and payable by the Company 18 months following the closingdate.
The financings are subject to completion of legal andtechnical due diligence and completion of all standard documentation forthis type of loan. The transactions are expected to close no later thanNovember 30, 2010.
The Company will pay a finder's fee equal to2% of any amount drawn down on either facility. This fee will be anon-cash fee and will be paid by the issuance of shares of Tamerlane atthe market price at the time of drawdown. All issuances of Tamerlaneshares under this debt facility are subject to the approval of the TSXVenture Exchange.
Mike Willett, CEO of Tamerlane commented,"Margaret Kent, our Chair, and I are pleased that we have arranged thisfinancing, which will enable us to proceed with the final engineeringand development of the mine and mill and infrastructure facilities toplace the Pine Point Mine into production. By the end of the firstquarter of 2011, we expect to have completed our update of the 2008feasibility study. We are encouraged that we have found no major impactto capital and operating costs to date and anticipate that there willnot be any significant change to the economics of the project."
MargaretKent, Tamerlane's Chair, added, "We are proceeding on track with ournegotiations with lenders for the larger project financing package andwith parties who will provide funding linked to concentrate off-takeagreements. We anticipate that we will have term sheets acceptable tothe Company in approximately six months. We have arranged this currentfinancing so as not to dilute shareholders' equity, while maintainingflexibility to take advantage of any opportunity that would enable us togrow the Company on terms that would be accretive to shareholders.Currently Tamerlane has 65.5 million shares issued and outstanding and79.7 million shares on a fully diluted basis."
About Tamerlane Ventures Inc.
TamerlaneVentures Inc. is an exploration and development mining company withadvanced base metal development projects in Canada and Peru. The Companyis working towards bringing the world-class Pb/Zn Pine Point Propertyback into production in the Northwest Territories, Canada, anddeveloping its Los Pinos heap leach copper project in Peru. TheCompany's primary focus is the Pine Point Project, which consists of thePine Point Mine, which was the largest and most profitable base metalmine in Canadian history. Tamerlane controls the Pine Point Project,along with a large contiguous property to the west.
On behalf of Tamerlane Ventures Inc.
Michael A. Willett, Chief Executive Officer
Caution Concerning Forward-Looking Information
Thispress release contains forward-looking information within the meaningof applicable securities laws. We use words such as "may", "will","should", "anticipate", "plan", "expect", "believe", "estimate" andsimilar terminology to identify forward-looking information. It is basedon assumptions, estimates, opinions and analysis made by management inlight of its experience, current conditions and its expectations offuture developments as well as other factors which it believes to bereasonable and relevant. Forward-looking information involves known andunknown risks, uncertainties and other factors that may cause our actualresults to differ materially from those expressed or implied in theforward-looking statements and accordingly, readers should not placeundue reliance on those statements. Risks and uncertainties that maycause actual results to vary include but are not limited to thespeculative nature of mineral exploration and development, including theuncertainty of reserve and resource estimates; operational andtechnical difficulties; the availability to the Company of suitablefinancing alternatives; fluctuations in zinc, lead and other resourceprices; changes to and compliance with applicable laws and regulations,including environmental laws and obtaining requisite permits; political,economic and other risks arising from our activities; fluctuations inforeign exchange rates; as well as other risks and uncertainties whichare more fully described in our annual and quarterly Management'sDiscussion and Analysis and in other filings made by us with Canadiansecurities regulatory authorities and available at www.sedar.com.
SOURCE: Tamerlane Ventures Inc.
TamerlaneVentures Inc. Tina Rosenberg Investor Relations 360-752-9462trosenberg@tamerlaneventures.com www.tamerlaneventures.com
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