Orion Mine Finance announced today that, on April 13, 2018, Orion Co-VI Ltd. a corporation controlled by Orion Mine Finance Management II Limited purchased 150,000,000 newly issued common shares of Victoria Gold Corp. at a purchase price of C$0.50 per Common Share for gross proceeds of C$75,000,000. The Orion Private Placement was completed as a part of an approximately C$295 million financing package provided by certain affiliates of Orion for the development by Victoria of the Eagle Gold project in the Yukon Territory. The Orion Financing consisted of the Orion Private Placement and a US$75,000,000 (approximately C$94,500,000) senior secured credit facility and a US$100,000,000 (approximately C$126,000,000) subordinated secured credit facility with an affiliate of Orion. The Orion Financing was entered into concurrently with a financing between Victoria and Osisko Gold Royalties Ltd. The Osisko Financing consisted of a royalty purchase agreement and royalty agreement with respect to the granting of a 5% net smelter return royalty (subject to reduction to 3%) to Osisko on the Eagle Gold project (subject to certain exclusions) for an aggregate purchase price of C$98,000,000 (of which $49,000,000 was advanced at the time of the Orion Private Placement) and the acquisition by Osisko of 100,000,000 Common Shares to Osisko by way of private placement at a price of C$0.50 per share for gross proceeds of C$50,000,000.
On April 13, 2018, Orion also received warrants to purchase 25,000,000 Common Shares at a purchase price of C$0.625 per Common Share until April 13, 2023. The terms and conditions of the Warrants prohibit the acquisition of additional Common Shares upon the exercise of warrants where such issuance would result in Orion holding more than 19.99% of the outstanding Common Shares on an undiluted basis. The exercise of Warrants in excess of the 19.99% threshold will be cash-settled by Victoria.
Orion also entered into a cash-settled European gold call option certificate with Victoria with respect to options on 20,000 ounces of refined gold exercisable by Orion Co-VI at a price of US$1485 per troy ounce, settled on April 13, 2023. Orion Co-VI also entered into a gold offtake agreement with Victoria entitling Orion Co-VI to purchase 25% of the gold production from the Eagle Gold project on the terms set out therein.
Prior to the Equity Investment, Orion did not own any common shares of Victoria. Following the Equity Investment and the Osisko Private Placement, Orion’s securityholding percentage is 19.55%, on a non-diluted basis (based on 517,137,416 Common Shares outstanding prior to the Financings). On a partially diluted basis, after giving effect to the exercise of the Warrants and the terms of the Warrants that prevent Orion from becoming a ‘control person’, Orion’s securityholding percentage in the Common Shares would be 19.99%.
Orion acquired the Common Shares and Warrants for investment purposes. Orion has no current plan or future intentions which relate to, or would result in, acquiring additional securities of Victoria, disposing of securities of Victoria, or any of the other actions requiring disclosure under the early warning reporting provisions of applicable securities laws. Depending on market conditions, Orion’s view of Victoria’s prospects and other factors considered relevant by Orion, Orion may acquire additional securities of Victoria from time to time in the future, in the open market or pursuant to privately negotiated transactions, or may sell all or a portion of its securities of Victoria.
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