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Continental Gold Announces Fully Subscribed US$175 Million Financing Package Backed by Newmont Mining and Triple Flag

 

 

 

 

 

Continental Gold Inc. (TSX:CNL) (OTCQX:CGOOF) is pleased to announce that it has obtained a US$175 million financing package consisting of (i) US$75 million of unsecured convertible debentures being issued to certain investors, including a US$50 million Debenture from Newmont Mining Corporation, and (ii) a US$100 million gold and silver stream  from Triple Flag Mining Finance Bermuda Ltd.. Proceeds from the Financing Package will be used for general and working capital purposes and toward construction, commissioning and start-up of the Company’s Buriticá Project located in Antioquia, Colombia. The Company has also agreed with RK Mine Finance to make certain amendments to its existing credit agreement in respect of the security documents in connection with the Stream.

 

Financing Package

 

Unsecured Convertible Debenture

 

  • Aggregate US$75 million unsecured 5-year and 2-month Debentures with a 5% interest rate payable semi-annually in arrears.
  • Each of the Debentures will be convertible at the holder’s option into common shares of the Company at a conversion price of C$3.00 per Share, representing a 27.1% premium to the 30-day volume weighted average share price on the Toronto Stock Exchange. Assuming full conversion of the Debenture issued to Newmont only, Newmont’s ownership in the Company would increase to approximately 28%.
  • Each of the Debenture holders agree not to engage in any short sales or other similar transactions with respect to all aspects of the Debenture.
  • The Company has the option to redeem all, but not less than all, of the Debentures, at a redemption price equal to 100% of the principal amount then outstanding, plus all accrued and unpaid interest, if the closing price of the Shares on the TSX is at least 130% of the Conversion Price for each of the 20 trading days before a notice of redemption is delivered to the holders, subject to the terms of the Debentures (including the right of holders to convert prior to redemption).

 

Gold and Silver Stream

 

  • US$100 million subordinated secured 2.1% gold and 100% silver stream on the Buriticá Project, where payable silver is deemed to be 1.84 ounces of payable silver for each ounce of payable gold.
  • Ongoing payments of 10% and 5% of the spot price of gold and silver, respectively.
  • Full buyback option, on or before December 31, 2021, of the entire gold stream for US$80 million, less any gold stream net cash flows received as at the time of buyback.
  • Closing and funding of the Stream deposit is subject to customary closing conditions.

 

Maxit Capital acted as financial adviser to Continental Gold with respect to the Stream transaction.

 

About Triple Flag

 

Triple Flag Mining Finance Bermuda Ltd. primarily targets precious metal streaming and royalty investments in the mining sector, with backing by Elliott Management Corporation, an experienced global investment firm with more than US$35 billion of assets under management. Triple Flag’s focus is on being a leading sought-after long-term funding partner to mining companies throughout the commodity cycle. Triple Flag has committed nearly US$1 billion to the mining sector in less than three years.

 

About Newmont Mining Corporation

 

Newmont is a leading gold and copper producer. The Company’s operations are primarily in the United States, Australia, Ghana, Peru and Suriname. Newmont is the only gold producer listed in the S&P 500 Index and was named the mining industry leader by the Dow Jones Sustainability World Index in 2015, 2016, 2017 and 2018. The Company is an industry leader in value creation, supported by its leading technical, environmental, social and safety performance. Newmont was founded in 1921 and has been publicly traded since 1925.

 

About Continental Gold

 

Continental Gold Inc. is an advanced-stage exploration and development company with an extensive portfolio of 100%-owned gold projects in Colombia. Formed in April 2007, the Company – led by an international management team with a successful track record of discovering and developing large high-grade gold deposits in Latin America – is focused on advancing its fully-permitted high-grade Buriticá gold project to production with first gold pour on track for early 2020.

 

Posted March 15, 2019

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