Rusoro Mining Raises US$80 Million Via Exchangeable Loan
June 10 2008 - 2:00AM
Marketwired
VANCOUVER, BRITISH COLUBMIA (TSX VENTURE: RML) is pleased to
announce that Peter Hambro Mining Plc ("PHM") has agreed to make a
strategic US$20 million investment in Rusoro and its affiliates
(collectively the "Rusoro Group") as part of a larger US$80 million
senior secured exchangeable loan (the "Loan"), exchangeable into
shares of Rusoro at C$1.25 per Rusoro share. The remainder of the
Loan will be funded by a syndicate including funds which are
investment managed by BlackRock Investment Management International
Limited, GLG Partners Limited and Lansdowne Partners Limited as
well as Endeavour Mining Capital Corp. (collectively, the
"Lenders"). Rusoro will act as a guarantor of the Loan. Proceeds
from the Loan will be used for regional consolidation opportunities
approved by the Lenders and for general corporate purposes. PHM has
also entered into an option agreement with the other Lenders which
gives PHM the right to acquire from them at a price of C$2.20 per
share, the Rusoro shares which such other Lenders may receive upon
exchange of their Loan (the "Option Agreement").
PHM, the second largest Russian gold mining company, along with
a syndicate of institutional investors described above, has agreed
to provide the Rusoro Group with the US$80 million Loan. The
principal terms of the Loan include: 10% annual coupon payable
semi-annually, 2 year term, exchangeable at any time at C$1.25 per
Rusoro common share, pro-rata participation in future equity
fundings for the term of the Loan (subject to prepayment or
exchange), and secured by share pledges over Rusoro's principal
assets including Choco 10. The Lenders have also entered into the
Option Agreement (described above) with PHM. The Loan will be drawn
down today and be made available in two tranches. US$28 million
will be available immediately for general corporate purposes, with
the remaining US$52 million made available once pre-agreed
strategic milestones are met.
Exchange of PHM's US$20 million loan into shares would give PHM
an interest of approximately 4.0% of the partially diluted shares
in Rusoro, being the common shares currently in issue plus the
aggregate of the shares to be issued on exercise of the exchange
right by PHM in respect of its Loan participation, but excluding
any shares that PHM could receive pursuant to the Option Agreement.
Full exercise of the Option Agreement would give PHM an interest of
approximately 14.2% of the partially diluted shares in Rusoro
(being calculated on the same basis as above, but allowing for full
exercise of the Option Agreement and full exchange of the
Loan).
PHM has two principal operating mines in the Amur region in the
Russian Far East. In 2007, PHM's total attributable gold production
was c.297,000 ounces and PHM continues to be one of the industry's
lowest cost producers with a cash operating cost at Pokrovskiy, one
of its principal operating mines, of US$143 per ounce (as at Dec.
31 2007). PHM has offices in London, Moscow and Blagoveschensk and
PHM's shares are traded on the AIM market of the London Stock
Exchange under the symbol POG.
Commenting on the transaction, Rusoro CEO Andre Agapov states:
"We are delighted to welcome PHM's strategic investment as we
implement our strategy to become a major gold producer in
Venezuela."
Commenting further, Peter Hambro, Executive Chairman of PHM,
said: "We have always said that any investment outside Russia would
need to have a Russo-centric rationale and the Rusoro investment is
just such an opportunity. With it we have a strategic investment in
a growing gold producer that is backed by proven reserves and
resources and a successful management team."
Advisors
Rusoro's financial advisor is Endeavour Financial International
Corporation and its legal advisors are Anfield Sujir Kennedy &
Durno in Canada and Gersten Savage LP in the United States.
Qualified Person: Mr. Gregory Smith, P.Geo, the Vice-President
Exploration of the Company, is the Qualified Person as defined by
National Instrument 43-101, and is responsible for the accuracy of
the technical information in this news release.
ON BEHALF OF THE BOARD
Vladimir Agapov, Chairman
Forward-looking statements: This document contains statements
about expected or anticipated future events and financial results
that are forward-looking in nature and as a result, are subject to
certain risks and uncertainties, such as general economic, market
and business conditions, the regulatory process and actions,
technical issues, new legislation, competitive and general economic
factors and conditions, the uncertainties resulting from potential
delays or changes in plans, the occurrence of unexpected events,
and the Company's capability to execute and implement its future
plans. Actual results may differ materially from those projected by
management. For such statements, we claim the safe harbour for
forward-looking statements within the meaning of the Private
Securities Legislation Reform Act of 1995.
The TSX Venture Exchange has not reviewed and does not take
responsibility for the adequacy or accuracy of this release.
Contacts: Rusoro Mining Ltd. George Salamis President (604)
632-4044 or Toll Free: 1-800-668-0091 (604) 632-4045 (FAX) Email:
info@rusoro.com Website: www.rusoro.com
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