Aldridge Minerals Inc. announced that Orion Fund JV Limited, an affiliate of Orion Mine Finance, has agreed to extend the maturity date of the Company’s existing US$35,000,000 secured loan facility with Orion.
As previously announced, Aldridge is in advanced-stage discussions with Orion with respect to a potential transaction that would extend the maturity date of the Loan to up to December 31, 2017. As part of the Orion Transaction, the Company would concurrently commit to a silver stream transaction that would, upon the satisfaction of certain conditions, be implemented prior to December 31, 2017. The proceeds of the silver stream would, among other things, be used to repay the Loan. The Company expects the silver stream component of the Orion Transaction to require the Company to achieve certain milestones related to the financing and development of the Yenipazar mine in Turkey.
However, at the request of the Company, Orion has granted the Loan extension to September 26, 2016 in order to provide the Company with sufficient opportunity to consider an alternative to the Orion Transaction that has recently arisen. The proceeds of this alternative transaction, if completed, would be used to repay the Loan and to fund the Company’s on-going land acquisition and working capital requirements.
As consideration for granting the Loan extension to September 26, 2016, the Company has agreed to pay interest at the rate of the greater of LIBOR and 1% per annum plus a margin of 14% per annum on borrowings which remain outstanding under the Loan during the Loan extension period. In addition, Aldridge has granted to Orion a right of first refusal (the “ROFR”) in respect of future silver stream transactions undertaken by Aldridge in relation to silver produced from the Yenipazar mine. Under the terms of the ROFR, Orion will have a period of 15 days in which to accept the terms of any proposed silver stream transaction by the Company. If Orion elects to accept such terms, the Company and Orion will have a period of 30 days in which to seek to negotiate a definitive silver purchase agreement. If the parties are unable to reach agreement on the terms of a definitive agreement, Aldridge will have a period of 60 days in which to reach agreement with a third party with respect to a silver stream transaction so long as the terms of such agreement are no more favourable to such third party as those offered by the Company to Orion.
Orion has also agreed to the Company’s request for a US$2,000,000 drawdown under the Loan in order to continue to fund land purchases in the interim.
While the Company intends to work diligently towards completing the Orion Transaction or an alternative transaction, there can be no assurance that any transaction will be completed prior to the revised maturity date of the Loan.