The Conversation (0)
Avanti Mining Inc. (TSXV:AVT) together with its wholly owned subsidiary Avanti Kitsault Mine Ltd., announced a binding and committed term sheet with CEF Holdings Limited and Resource Capital Fund IV L.P. for an additional US$10 million secured bridge loan from RCF and extends and restructures its existing US$20 million bridge loan. Both loans will convert into Convertible Debentures on December 31, 2013 if Avanti has not completed a Rights Offering of no less than US$175 million with the possibility of all or a portion of this Rights offering to be back stopped by the Lenders.
As quoted in the press release:
Of the $10 million new funding, $5 million will be advanced on closing with the remaining $5 million to be advanced in two tranches of $2.5 million upon satisfaction of certain conditions. The credit committees of both Lenders have approved the term sheet and closing of the facility, is expected on or before July 12, 2013, subject to satisfactory completion of final loan documents and other customary conditions.
The loan will accrue interest at 10% and all interest and arrangement fees are payable in cash or shares of Avanti at the choosing of each lender. The Company will pay the Lenders a 5% extension fee on the US$20 million bridge in cash or shares at the election of each lender and issue the Lenders an aggregate of 10 million three-year warrants with an exercise price to be established at a 35% premium to the previous 20-day VWAP of Avanti shares at the time of closing. On the new $10 million bridge loan facility with RCF, the Company will pay a 5% establishment fee in cash or shares at their election and issue 10 million three-year warrants with an exercise price to be established at a 35% premium to the previous 20-day VWAP of Avanti shares at the time of closing.
Both loans will convert into Convertible Debentures on December 31, 2013 if Avanti has not completed a Rights Offering of no less than US$175 million with the possibility of all or a portion of this Rights offering to be back stopped by the Lenders. The Convertible Debentures will be due on December 31, 2014 with a conversion price of $0.07 per share. The minimum price of the Rights Offering will be C$0.05 share in accordance with the TSX-V policies.
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