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GoGold Enters into Definitive Agreements in Connection with US$35,000,000 Project Financing

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GoGold Enters into Definitive Agreements in Connection with US$35,000,000 Project Financing

 

 

 

 

 

 

GoGold Resources Inc. (TSX: GGD) is pleased to announce that it has executed definitive agreements with Orion Mine Finance Fund I in connection with the US$35 million debt and equity financing previously announced on July 12, 2013.  The private placement and debt financing are expected to close prior to the end of September 2013.

 

 

Orion Mine Finance, formerly known as RK Mine Finance Fund II LP, has agreed to provide US$30 million in senior secured debt, to be drawn in two tranches subject to customary conditions, which shall bear interest at Libor plus 6.5%, repayable in equal instalments over a three year period commencing in September 2014.

 

 

In addition, on the Closing Date, Orion Mine Finance will purchase 4,693,563 common shares of GoGold through a non-brokered private placement for gross aggregate proceeds of US$5 million, representing a purchase price of approximately CDN$1.1030 per Common Share, which is a 5% premium to the volume weighted average share price of the Common Shares on the Toronto Stock Exchange for the twenty trading days ended September 13, 2013. Orion Mine Finance will also receive 2,000,000 Common Share purchase warrants.  Each whole Warrant will entitle Orion Mine Finance to acquire one Common Share at a price of $1.50 for a period of two years from the Closing Date.  The Common Shares and the Warrants, and the Common Shares issuable on exercise of the Warrants, will be subject to a four-month hold period from the Closing Date.

 

Orion Mine Finance will have the right to purchase additional Common Shares and/or participate in future securities offerings by GoGold in order to maintain its ownership share in GoGold.

 

 

The net proceeds of the Financing Transactions will be used to fund the development and construction of GoGold’s Parral tailings project in Chihuahua, Mexico and for general working capital purposes.

 

 

GoGold and Orion Mine Finance have also entered into a definitive off-take agreement together with GoGold’s indirect wholly-owned subsidiary, Grupo Coanzamex S.A. de C.V. which shall take effect on the Closing Date.  Under the Off-Take Agreement, Coanzamex has agreed to sell and Orion Mine Finance has agreed to purchase all of the refined gold and refined silver produced from the Parral tailings project, up to an aggregate of 150,000 ounces of refined gold and 15 million ounces of refined silver.

 

 

Terry Coughlan, President and Chief Executive Officer of GoGold, states: “We are pleased to welcome Orion Mine Finance as an investor in GoGold and look forward to our continued relationship. With the proceeds of this financing, GoGold will be in a strong position to advance the Parral tailings project. We believe this investment further demonstrates the strength of the project.”

 

 

The closing of the Financing Transactions are conditional upon customary closing conditions, including the approval of the TSX.

 

 

About Orion Mine Finance

 

 

Orion Mine Finance provides flexible financing solutions to mining companies in the precious and base metals sectors for the purposes of developing, constructing, expanding or acquiring mining projects. Orion Mine Finance has approximately $1.14 billion under management, dedicated exclusively to the mine finance business. Orion Mine Finance Fund I, formerly known as RK Mine Finance Fund II LP, was launched in 2012 and is one of the world’s leading mining sector-focused investment funds.

 

Posted September 18, 2013

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