new Strike Minerals arranges $3.85-million with WatertonTicker Symbol: C:STKStrike Minerals arranges $3.85-million with WatertonStrike Minerals Inc (C:STK)Shares Issued 69,647,110Last Close 11/2/2011
.07Thursday November 03 2011 - News ReleaseMr. Michael Newbury reportsSTRIKE MINERALS INC. SECURES EDWARDS MINE PROJECT FINANCING WITH WATERTON GLOBAL VALUEStrike Minerals Inc. has signed certain term sheets pursuant to which Waterton Global Value LP will provide the company with up to $3.85-million of financing consisting of $3.5-million of gold stream debt financing and $350,000 of equity financing. In connection with the gold stream debt financing, Waterton will provide the company with a $350,000 bridge loan.The principal amount of the gold stream debt financing will be provided in three tranches of $1.5-million, $1-million and $1-million, and will be secured by all of the assets of the company, including the assets comprising the Edwards Mine Project. If all three tranches of the Gold Stream Debt Financing are drawn, repayment of such financing will occur by the Company making 12 monthly payments to Waterton commencing on the last business day of December 2012, and ending on the last business day of November 2013. Each monthly repayment will be made, at the option of Waterton, by the Company delivering to Waterton either gold bullion ounces or certain fixed cash amounts. If the Company makes any monthly payment by delivering gold bullion ounces to Waterton, the number of ounces so delivered shall be calculated based on a deemed gold price that is, effectively, equal to 80% of the then prevailing spot price of gold. Any outstanding principal amount of the Gold Stream Debt Financing shall accrue interest at a rate of 7.00% per annum.In connection with the Gold Stream Debt Financing, Waterton will advance the Company a $350,000 Bridge Loan that accrues interest at a rate of 7.00% per annum and is secured by the Company's direct 87.5% interest in the Edwards Mine Project. The principal amount of the Bridge Loan shall be repaid by the Company on the date that is the earlier of: (i) six (6) months after the initial execution date of the Bridge Loan agreement, or (ii) the date on which the Company and Waterton enter into the Gold Stream Debt Financing. In connection with the Bridge Loan, the Company will provide Waterton with 1,000,000 bonus shares. The Company will also pay Waterton a 2% structuring fee relating to each of the Gold Stream Debt Financing and the Bridge Loan.In addition to the Gold Stream Debt Financing, Waterton also intends to provide the Company with $350,000 of Equity Financing, the terms and conditions of which shall be similar to the Company's recently announced equity offering.The Company will use the proceeds of the Financing for the development and initial production from the Edwards Mine Project.The Company has separately entered into a mine gold and silver supply agreement with Waterton, pursuant to which the Company will sell gold and silver produced at the Edwards Mine Project to Waterton based on certain agreed terms and conditions.The Financing is expected to close on or before November 30, 2011 subject to definitive documentation, Board and regulatory approval of the TSX Venture Exchange and customary closing conditions.Mike Newbury President & CEO, comments, "Strike appreciates Waterton's practical approach, confidence and support to provide the $3,850,000 financing that is expected to be adequate funds to complete dewatering, conduct underground exploration and commence initial production at the Edwards Mine site. Financing through debt is less dilutive than equity and this financing, in conjunction with our recent equity financings will see us into production in 2012. The dewatering has allowed us to examine the 40 metre level and we have located and are sampling mineralized zones that were developed but not mined by the previous operators. We have also started dewatering the 60m level."Cheryl Brandon, Portfolio Manager at Waterton Global, stated, ""Waterton is pleased to be able to partner with Strike Minerals. We look forward to building a strong relationship with the management team and further developing the Edwards Mine into production. As a fully-permitted near-term gold producer, the company is well-positioned to benefit from strong commodities markets".We seek Safe Harbor.