#1400 1111 West Georgia St. Vancouver, BC V6E 4M3
MONTAN MINING SIGNS BINDING TERM SHEET WITH CARTESIAN
ROYALTY HOLDINGS FOR FUNDING PACKAGE OF UP TO USD $10
MILLION
- Tranched investment intended to fund Mirador project
acquisition, Cerro Dorado startup and capacity
increase
- Investment up to USD $10 million, structured in a 25%
equity and 75% stream split
Vancouver, BC, April 25th, 2017 - InvestorsHub NewsWire
- Montan Mining Corp (TSXv: MNY | FSE: S5GM |
SSE:MNYC) ("Montan" or the
"Company") is pleased to announce that that it has
entered into a binding term sheet with Cartesian Royalty Holdings
Pte. Ltd. ("CRH") for a financing package of up to
USD $10 million to fund the acquisition of Kairos Capital Peru
S.A.C. and M&S Transportes y Servicios Generales S.R.L,
including the Mirador processing plant (together,
"Mirador"), as announced on February 16, 2017; and
to bring Montans 100%-owned Cerro Dorado gold processing plant into
full commercial production and increase its capacity.
The Term Sheet provides that CRH will invest in three (3)
tranches, each with a specified use of proceeds, as well as
additional tranches at the discretion of CRH. Each tranche will be
structured in a 25% equity / 75% stream ratio.
Streaming Investment Terms: For each USD $1.0
million in streaming investment, CRH is to receive 2,500 ounces of
gold or gold equivalent from Montan, payable over a maximum of 50
months from closing. Repayment of each streaming investment is to
commence six (6) months after drawdown over a repayment period of
42-months, subject to two (2) months of optional payment holidays
whereby Montan can defer its monthly payment. Each exercised
payment holiday must be separated by at least 6 months.
Equity Investment Terms: The Montan units are
priced at a 20% discount to the VWAP of Montan common shares for
the 30-day calendar day period immediately preceding the Term
Sheet; each unit will consist of one common share and one common
share warrant; the warrant will have an exercise price of a 25%
premium to the VWAP with a term of five (5) years subject to TSX-V
approval or other regulatory constraints.
The initial tranche (Tranche 1) investment of
USD $3.0 million is intended for the acquisition of Mirador (see
Montan press release dated February 16, 2017) and will be comprised
of USD $2.25 million as a secured streaming investment in Montan
and USD $0.75 million as an equity investment in Montan. Conditions
to closing Tranche 1 include:
- Satisfactory
completion of due diligence by CRH on Montan, Mirador, Cerro
Dorado, and the Kairos and Cerro Dorado SAC holding
companies;
- Montan's raising at
least USD $1.0 million for optimization CAPEX and working capital
at Mirador
- Development of an
operating plan in consultation with CRH including all necessary
permits to execute the operating plan; and
- Long-term contracts
at Mirador totaling no less than 70% of plant capacity.
Subsequent tranches are subject to satisfactory post-acquisition
performance at Mirador, and are expected to comprise two (2)
tranches to bring the Cerro Dorado plant into commercial operation
and to increase its capacity to 125 tonnes per day.
Net smelter returns royalty ("NSR"): Upon
closing of Tranche 1, Montan will provide CRH with a two percent
(2.0%) NSR on the Mirador and Cerro Dorado plants and such other
concessions, JV properties and mines that accrue to Kairos SAC or
Cerro Dorado SAC; and any future assets acquired, in whole or in
part, with CRH funds. 0.5% of the NSR can be purchased by Montan at
any time for USD $750,000. Montan would also have a right of first
offer on any sale of the NSR by CRH to a third party.
In addition CRH will have the right to appoint a non-executive
director to Montan's Board of Directors for as long as the
streaming investment is outstanding or CRH owns more than 5% of
Montan.
Cartesians tailored financing solution should allow Montan to
complete the purchase of the Mirador Plant and bring Cerro Dorado
into commercial production shortly thereafter. We are excited at
the prospect of having two assets in production before Q4 2017. We
are grateful to Cartesian for their approach and the flexibility
shown on the basis of project specific needs and our risk-balanced
cash flow projections, stated Luis Zapata, Executive Chairman of
Montan.
Peter Yu, Director of CRH stated, "Montan is a unique
diversified mineral processing project with strategic locations
throughout Peru and is permitted for production. We are confident
the Montan team will create substantial value for its stakeholders,
as well as artisanal miners in Peru through their efficient and
transparent business model.
The CRH financing is subject to the approval of the TSX Venture
Exchange.
On behalf of the Board of Montan.
Ian Graham
CEO and Director
Tel: +1.604.671.1353
Email: igraham@montanmining.ca
ABOUT CRH
CRH offers innovative financing structures with the goal of
creating long-term growth and value in world-class gold projects
around the globe. CRH is an affiliate of Cartesian Capital Group,
LLC, a global private equity firm with proven expertise in
assisting closely-held companies develop into global market
leaders. Cartesian Capital Group manages more than US$2.4 billion
in capital and has offices in New York, Sao Paulo, Shanghai,
Warsaw, and Bermuda.
For more information, please visit the website at http://www.cartesianroyalty.com
ABOUT MONTAN MINING
Montan Mining is an emerging precious metals producer focusing
on monetizing mining assets in Peru. The Company is is the 100%
owner of the operation ready Cerro Dorado gold processing plant
permitted to 125 TPD and the adjoining Rey Salomon gold mine in the
southern Peruvian mining district of Arequipa; and and is
completing the acquisition of the Mirador plant near Chimbote,
dirstrict of Ancash. Montan Mining has an experienced management
team with diverse technical, market, and finance expertise and is
supported by committed and sophisticated investors focused on
building value for the long term.
For more information, please visit the corporate website at
http://www.montanmining.ca or contact:
Investor Contact:
Luis F. Zapata
Executive Chairman
Email: lzapata@montanmining.ca
Tel: +1-604-358-1382
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 NEWS RELEASE.
Forward-Looking Statements: Certain statements in this press
release are forward-looking statements within the meaning of
applicable securities laws. Forward-looking statements in this
press release include those concerning the projected timing,
approval and closing of the CRH financing, Montans belief that the
proceeds will be sufficient to fund its Mirador acquisition and
bring the Cerro Dorado gold processing plant into full commercial
production, and increase its capacity to 125 tonnes per day. Such
forward-looking statements and information are subject to risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statement. Specific
risks included that we may not be able to secure mineral feed
stock, we may not be able to attract or retain key employees
necessary for our operations, we may not be able to finance
operations, and we may not be able to locate or negotiate
transactions which result in growth of our business. We may not be
able to become profitable even if we are producing and milling to
capacity, profitability depends on revenues and expenses which are
not completely controllable; we may not be able to secure mineral
feed from other miners; and we may not be able to restart
production because of technical or expense issues. Readers are
cautioned to review the risk factors of junior mining companies
which apply equally to our company, and to our management
discussion and analysis as filed on SEDAR. Other than as required
by law, we assume no obligation to update these forward looking
statements.
Montan Mining Corp. (TSXV:MNY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Montan Mining Corp. (TSXV:MNY)
Historical Stock Chart
From Sep 2023 to Sep 2024