VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 11, 2014) - Bralorne Gold Mines Ltd. (TSX VENTURE:BPM)(OTCQX:BPMSF)(BERLIN:GV7)(FRANKFURT:GV7) (WKN A0B75M) ("Bralorne" or the "Company") reports that further to the proposed acquisition of Bralorne by Avino Silver & Gold Mines Ltd. ("Avino") by plan of arrangement as announced on June 30, 2014 and August 1, 2014 (the "Transaction"), Avino has advanced to Bralorne the second loan instalment of $750,000 to meet Bralorne's ongoing working capital requirements.
Avino has now advanced to Bralorne a total of $1.25 million under the terms of the loan agreement previously announced on June 30, 2014 and July 24, 2014 (the "Loan"). The Loan bears interest at 12% per annum payable on maturity, and is repayable with interest thirty days after demand on October 31, 2014 (if the proposed arrangement is not completed for any reason), and is secured by a first charge general security interest over all of the assets, present and future, of Bralorne. The terms of the Loan and security were accepted for filing by the TSX Venture Exchange. The Loan was necessary to maintain Bralorne's operations and mitigate the immediate financial distress that Bralorne was experiencing. The Loan assists with immediate working capital deficiencies that Bralorne is experiencing as a result of lower than anticipated incidental revenue and cash inflow from operations.
The British Columbia Ministry of Energy & Mines (the "Ministry") has requested that Bralorne address a long term solution to the freeboard issue of the tailings storage facility, which the Ministry has determined to be inadequate. Bralorne intends to fully cooperate with the Ministry. The Company recently engaged an engineering firm to review the design for raising the dam and update the dam safety inspection, dam consequence classification and operating and emergency plans, as well as provide geotechnical supervision of construction works for raising the dam. Together with construction, the entire project is estimated to cost between $300,000 and $600,000. Bralorne is committed to responsible and environmentally safe mining, minerals processing and tailings management. In order to execute the tailings design updates and raise the dam, Bralorne will require additional capital.
Bralorne is reviewing its operational plan and is also discussing additional financing options with Avino to meet short term working capital requirements. The Company has not achieved commercial production and as such is not generating sufficient cash flow from its operations.
Bralorne's Board of Directors continues to recommend that Bralorne shareholders vote in favour of the Transaction with Avino. Pursuant to the Transaction, upon closing, Bralorne shareholders will receive 0.14 of an Avino common share for each Bralorne common share held by such shareholder (the "Share Exchange Ratio"), and all of the issued and unexercised stock options of Bralorne will be cancelled. Bralorne will as a result become a wholly-owned subsidiary of Avino. Avino previously held 179,149 common shares of Bralorne and recently purchased another 9,500,000 common shares of Bralorne from a third party, and therefore already owns 9,679,149 common shares of Bralorne, representing approximately 34% of Bralorne's outstanding common shares. Avino is Bralorne's largest shareholder and will vote in favour of the Transaction. The directors and officers of Bralorne have also entered into voting support agreements with Avino under which they have agreed to vote their Bralorne shares and options in favour of the Transaction, representing approximately 5.31% of the Bralorne common shares outstanding and 75% of the Bralorne outstanding options entitled to vote at the Bralorne annual general and special meeting scheduled to be held on October 9, 2014. The Share Exchange Ratio represents a 25.2% offer premium to Bralorne shareholders based on the closing prices of Avino and Bralorne on the TSX Venture Exchange as of June 27, 2014, the last trading day before the news release announcing the letter of intent with respect to the Transaction on June 30, 2014. Bralorne will mail a management information circular containing full details of the Transaction to its shareholders this week and a copy will also be available on www.sedar.com.
Considering the above and other factors, the independent directors of Bralorne have determined that the Loan and arrangement are in the best interests of Bralorne and its security holders. Accordingly, the Board of Directors is unanimous in recommending that security holders vote in favour of the Transaction.
About Bralorne
Bralorne is a Canadian junior mining and exploration company, whose current project is a 100% interest in the Bralorne Gold Mine, BC. The Bralorne mining camp has a history of past production of 4 million ounces of gold from three mines (Bralorne, Pioneer and King) that fed two mills with a combined capacity of 875 tons per day with gold grades that averaged half an ounce per ton until 1971. Historically, the focus was on mining high grade material delineated by driving drifts on the veins at successively lower levels in the mines. Minimal exploration work was conducted beyond the known veins, and the areas between the historical mines were left undeveloped. Under Bralorne's management, new mill facilities have been developed, permitted, and are fully operational, and new discoveries have been made within the gap areas between the old mines, using geochemical surveys followed by diamond drilling. On November 21, 2012, Bralorne filed on SEDAR a preliminary economic assessment report on the Bralorne Mine property prepared by Beacon Hill Consultants (1988) Ltd., which reported as at August 31, 2012 measured and indicated mineral resources of 170,583 tons grading 0.266 oz gold/ton, and inferred mineral resources of 272,089 tons grading 0.256 oz gold/ton (mineral resources are not mineral reserves and do not have demonstrated economic viability).
In 2011, Bralorne began limited production at 100 tons per day and has sustained the operation since that time. Despite the limited production, the mine property is still considered in the exploration and evaluation stage. During fiscal year 2013, Bralorne produced an estimated 3,842 ounces of gold. For more information, please feel free to visit Bralorne's website at: www.bralorne.com.
About Avino
Founded in 1968, Avino's mission is to create shareholder value through profitable organic growth at the historic Avino property near Durango, Mexico, and the strategic acquisition of mineral exploration and mining properties. For the six months ended June 30, 2014, Avino reported $10.9 million in revenues and had cash and equivalents of $13.6 million as at June 30, 2014. Avino is committed to managing all business activities in an environmentally responsible and cost-effective manner, while contributing to the well-being of the communities in which it operates. For more information, please feel free to visit Avino's website at: www.avino.com.
The securities of Avino referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. Accordingly, to the extent required, it is anticipated that the Transaction will be effected in reliance upon the exemption from registration provided by section 3(a)(10) of the U.S. Securities Act. This news release does not constitute an offer of securities, nor a solicitation for offers to buy any securities.
ON BEHALF OF THE BOARD
William Kocken, Chief Executive Officer
Safe Harbor Statement - This news release may contain "forward-looking information" and "forward-looking statements" (together, the "forward looking statements") within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995, including our belief as to the extent and timing of various studies and exploration results, the potential tonnage, grades and content of deposits, timing and establishment and extent of resources estimates. These forward-looking statements are made as of the date of this news release and the dates of technical reports, as applicable. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. While we have based these forward-looking statements on our expectations about future events as at the date that such statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements.
Such factors and assumptions include, among others, the effects of general economic conditions, the price of gold, silver and copper, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgments in the course of preparing forward-looking information. In addition, there are known and unknown risk factors which could cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain of our officers, directors or promoters with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the our common share price and volume; tax consequences to U.S. investors; and other risks and uncertainties. Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. We are under no obligation to update or alter any forward-looking statements except as required under applicable securities laws.
Cautionary Note to United States Investors - The information contained herein and incorporated by reference herein has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States securities laws. In particular, the term "resource" does not equate to the term "reserve". The Securities Exchange Commission's (the "SEC") disclosure standards normally do not permit the inclusion of information concerning "measured mineral resources", "indicated mineral resources" or "inferred mineral resources" or other descriptions of the amount of mineralization in mineral deposits that do not constitute "reserves" by SEC standards, unless such information is required to be disclosed by the law of the Company's jurisdiction of incorporation or of a jurisdiction in which its securities are traded. U.S. investors should also understand that "inferred mineral resources" have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. Disclosure of "contained ounces" is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place tonnage and grade without reference to unit measures.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.