Red Eagle Mining Gets US$65 Million Construction Financing

- March 25th, 2015

Red Eagle Mining (TSXV:RD) has secured a US$65 million financing with Orion Mine Finance for the construction of its San Ramon Gold Mine in Colombia. The deal includes a private placement of common shares as well as a US$60 million credit facility.

Red Eagle Mining (TSXV:RD) has secured a US$65 million financing with Orion Mine Finance for the construction of its San Ramon Gold Mine in Colombia. San Ramon is set to be the first mine in Colombia to operate under modern environmental permitting legislation with construction expected to begin in mid 2015.

Red Eagle’s deal with Orion includes a private placement of common shares as well as a US$60 million credit facility. As quoted in the press release, highlights of the facility included:

  • Draw down of the Credit Facility is subject to Red Eagle Mining completing an additional equity financing of at least US $15,000,000 (“Equity Financing”);
  • The Credit Facility will have a five year term with a principal holiday and capitalized interest for up to 18 months from the first advance;
  • Advances under the Credit Facility will bear interest at LIBOR +7.5%;
  • A Production Payment of US $30 per ounce produced is payable on the first 405,000 ounces of gold produced;
  • Granting of 5,000,000 warrants to purchase Shares to Orion exercisable for a five year term at a strike price determined in the context of the Equity Financing; and
  • Amounts outstanding under the Credit Facility will be secured against all of Red Eagle Mininggâ?s property and assets.

With regards to the private placement, the release stated:

Pursuant to the Private Placement, Red Eagle Mining will issue Shares in an amount equal to the lesser of US $4,000,000 divided by the US dollar equivalent of CAD $0.33 on the closing date and such number of Shares as would result in Orion owning 19.9% of the issued and outstanding shares. Orion also subscribed for a first tranche of US $1,000,000 which closed on February 3, 2015, as previously news released. Under the terms of the subscription agreement, so long as Orion owns at least 15% of the issued and outstanding shares, Orion shall have the right to appoint a director to the board of Red Eagle Mining and so long as Orion owns at least 5% of the issued and outstanding shares, Orion shall have the right to participate in any future equity financings in order to maintain Orion’s then current equity ownership in Red Eagle Mining.

Red Eagle CEO, Ian Slater, commented:

San Ramon is now fully permitted and close to being fully financed to meet the planned capital expenditure of US $74 million including contingencies.

Click here to read the Red Eagle Mining (TSXV:RD) press release

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