Kerr Mines announces US$27.6 million project financing and makes positive production decision
July 18 2018 - 6:30AM
Kerr Mines Inc. (TSX:KER) (OTC:KERMF) (FRA:7AZ1)
(“Kerr” or the “Company”) is pleased to announce
that it has signed a Letter of Intent with Pandion Mine Finance,
LLC (“Pandion”) for US$27.6 million to fund the development and
production of gold at the Copperstone Mine by Q4 2019.
The financing is subject to the execution of a
Prepaid Forward Gold Agreement (the “Agreement”),
with an anticipated initial tranche of US$19.6 million targeted for
August 2018 and a second tranche of US$8 million in July 2019.
Pandion anticipates signing a Definitive Agreement in August
2018.
The proceeds of the Agreement will be primarily
used to fund the Copperstone Mine into production by Q4 2019.
In addition, the Company will commence the 2018 drilling program
designed to convert a significant proportion of Measured, Indicated
and Inferred Resource into Proven and Probable that will extend the
mine life and cash flows.
“After careful review of the financing options
available, we are pleased to select Pandion Mine Finance as our
funding partner”, stated Claudio Ciavarella, CEO Kerr Mines
Inc “We believe the terms of this financing are competitive
and create value for our shareholders. It is another key
milestone that our team has achieved in just over a year since
taking the helm of the Company. With this funding arrangement
now in place, we are highly focused on continuing to create
shareholder value and are now able to turn our attention to
achieving our next targets – production in 2019, expansion of
resources and mine life ” continued Ciavarella.
The highlights of the Agreement
are:
- US$27.6 million financing in two tranches, US$19.6 million in
August 2018 and US$8 million in July 2019
- The Company will deliver to Pandion a total of approximately
95,000 ounces over a 40 month period. However, no gold shall be
deliverable by the Company during the first 22 months.
- Pandion will pay the Company the market price of delivered gold
less a specified discount per ounce. In addition, Pandion will
participate in a portion of any increase in the price of gold.
- All other production from the Copperstone will be sold at the
market price.
- Additionally, Pandion would have the option to elect at any
time to receive common shares of Kerr Mines Inc., at a price of
$0.40 per share, in lieu of delivery of up to 10,000 ounces of
gold, subject to the prior approval of the TSX.
- Kerr will retain the right to buy out and terminate the
Agreement at any time
About Pandion Mine Finance,
LPPandion is a mining-focused investment firm backed by
MKS PAMP Group and Ospraie Management, LLC that provides flexible
financing solutions to developing mining companies.
About Kerr Mines Inc. Kerr
Mines is an Emerging American Gold Producer currently advancing the
100% owned, fully permitted past-producing Copperstone Mine project
to production. Copperstone is a high-grade gold project located
along a detachment fault mineral belt in mining-friendly Arizona.
This gold project in Arizona demonstrates tremendous exploration
potential targeting multi-million ounce prospects within a 4,775
hectare (11,800 acres) land package.
PDF Version of 43-101 technical report available:
http://kerrmines.com/wp-content/uploads/KerrCopperstone_PFS_43-101.pdf
YouTube: Copperstone Gold Mine KER:TSX 3 min.
Investor Tour Video
For further information
contact:Claudio Ciavarella Chief Executive
Officercciavarella@kerrmines.com 416-855-9305
Cautionary Note Regarding Forward
Looking Statements This news release contains
forward-looking statements, including current expectations on the
timing of the commencement of production and the rate of
production, if commenced. These forward-looking statements entail
various risks and uncertainties that could cause actual results to
differ materially from those reflected in these forward-looking
statements. Such statements are based on current expectations, are
subject to a number of uncertainties and risks, and actual results
may differ materially from those contained in such statements.
These uncertainties and risks include, but are not limited to, the
strength of the Canadian economy; the price of gold; operational,
funding, and liquidity risks; the degree to which mineral
resource estimates are reflective of actual mineral resources; and
the degree to which factors which would make a mineral deposit
commercially viable are present; the risks and hazards associated
with underground operations. Risks and uncertainties about Kerr
Mines’ business are more fully discussed in the Company's
disclosure materials, including its annual information form and
MD&A, filed with the securities regulatory authorities in
Canada and available at www.sedar.com and readers are urged to read
these materials. Kerr Mines assumes no obligation to update any
forward-looking statement or to update the reasons why actual
results could differ from such statements unless required by
law.Neither TSX nor its Regulation Services Provider (as that term
is defined in the policies of the TSX) accepts responsibility for
the adequacy or accuracy of this release and no stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.