Photo by: Fortune Minerals
TORONTO (miningweekly.com) – Canadian project developer and owner of 12% of the Revenue silver mine (RSM), in south-west Colorado, Fortune Minerals, on Wednesday announced that it had secured a series of financings, and clinched an amended agreement to buy the remaining stake in RSM.
TSX-listed Fortune said it could now acquire the remaining interest in the mine at lower payment terms under an accelerated schedule.
The company, through its subsidiary Fortune Revenue Silver Mines (Fortune Revenue), acquired an initial 12% participating interest in RSM in May and had been the operator of the mine since then.
"We are very pleased to announce an amended agreement to complete the acquisition of RSM under more attractive terms. The financing structure also preserves the ability of Fortune's shareholders to maximise their participation in future upside opportunities from any increase in commodity prices and potential delineation of new resources from the mine's significant exploration potential,” Fortune president and CEO Robin Goad said.
Under the amended agreement, Fortune Revenue could now complete the RSM transaction by paying the owners an initial $15.5-million, with an obligation to pay a further $10-million after completing the acquisition.
Under the previous terms of the agreement, Fortune Revenue was obliged to make an initial cash payment of $14-million, with total deferred payment obligations of $34.5-million to $36.8-million.
Fortune Revenue would still be required to make payments of up to $4.5-million to the previous owner of RSM. The target closing date for the transaction was extended from September 2 to October 1.
To finance the acquisition and operations of RSM, the company had entered into two term sheets with Lascaux Resource Capital Fund I to finance the final acquisition under a metal prepay facility that would be repaid with a fixed schedule of metal shipments from RSM, including interest over a four-year period.
The first facility would provide an initial $4-million bridge loan to the company for working capital and to complete near-term capital improvements required at the mine.
The second would provide $35-million and is comprised of a first tranche of $25-million to repay the bridge loan, complete the acquisition of RSM, pay the amount due to the previous mine owner and provide additional project working capital; and a second tranche of $10-million to fund the remaining deferred payment due to the current owners.
Completing the financings was subject to signing definitive documentation.
Fortune had also agreed to a private placement offering with an institutional investor for another C$1-million in proceeds.
It is also making headway in developing the Nico gold/cobalt/bismuth/copper mine and mill, in Canada's Northwest Territories, while the company last September voluntarily ended its summer field programme in the Klappan region of British Columbia, where it is pressing ahead with its Arctos anthracite project, pending the provincial and Tahltan First Nation governments ironing out issues.
Investors were pleased with Wednesday's announcement, pushing Fortune’s TSX-listed stock up 9.68% to C$0.34 apiece at the close of business.