SilverCrest Announces Agreement With MacQuarie Bank
Limited For US12.5 Million Project Loan, Hedging Facilities and Bridge
Loan For Santa Elena Project
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TSX-V: SVL
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For Immediate Release
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VANCOUVER, B.C. June 8, 2009 - SilverCrest Mines Inc. (the "Company") is
pleased to announce it has reached agreement with Macquarie Bank Ltd. on a
US$12.5 million debt facility to finance the development of its Santa Elena
Project in Sonora, Mexico.
J. Scott Drever, President stated; "These
financial arrangements with Macquarie Bank are extremely important to our
plans for the development of the Santa Elena gold and silver project in
Mexico. The funds will enable us to finalize the acquisition of 100%
interest in the project and will provide sufficient funds, in conjunction
with the US$12 million from our gold purchase agreement with Sandstorm
Resources, to complete the construction and development of the open pit
heap leach operation that has been designed and engineered for Santa Elena.
The hedging program assures that we can achieve our projected profit
margins while the debt is outstanding but still leaves a substantial
portion of our gold production and all of our silver production
unencumbered. The addition of a debt component to the financing package
enables us to keep the potential share dilution of the Company to a
reasonable level. This will obviously be to the benefit of current
shareholder values once cash flow from operations commences in 2010".
The general terms and conditions of the debt and
hedging facilities are as follows:
US$12.5 Million Project Loan and Hedging
Facilities
The Company has accepted a
letter of offer dated June 5, 2009 from Macquarie Bank Limited
("Macquarie") for a US$12.5 million project loan facility
(the "Project Loan") and associated hedging facilities (the
"Hedging Facility") to partially fund the cost of development of
the Company's Santa Elena Gold Project in Mexico.
The Project Loan will be
made to the Company's wholly-owned Mexican subsidiary, Nusantara de
Mexico S.A. de C.V. (the "Borrower"), will bear
interest at the U.S. dollar LIBOR rate plus 6.0% per annum before repayment
of 50% of the Project Loan and 5.5% after repayment of 50% of the Project
Loan. The Project Loan shall be repaid in full on or before March 31,
2013 pursuant to an amortization schedule. Security for the Project
Loan will include a general security agreement and guarantees from the
Company. Drawdowns under the Project Loan
will be subject to the terms and conditions of a definitive Project Loan
agreement to be entered into, including various due diligence conditions
and other customary lending conditions.
In consideration for the
provision of the Project Loan, the Company has agreed to pay Macquarie
certain fees customary for such a facility and to issue
five (5) million common share purchase warrants, each
warrant exercisable to purchase one common share of the Company for a
period of three years at a price of Cdn$0.90 per share. The warrants
are subject to TSX Venture Exchange approval. In addition, Macquarie
has agreed to cancellation of its existing outstanding warrants exercisable
for a total of 3,216,782 shares.
The Hedging Facility will be established between
the Borrower and Macquarie to cover of 55,000 ounces of gold production
over the first three years of production. All hedging will be done
through Macquarie and executed under non-margin facilities on agreed market
terms.
Bridge Finance
Facility
The Company has also
accepted a letter of offer dated June 5, 2009 from Macquarie for a Cdn$3.0
million Bridge Finance Facility to partially fund the cost of the Borrower
completing payment of the acquisition cost of the Santa Elena Gold
Project. The Bridge Finance Facility is made in connection with the
Project Loan and is to be repaid from the first drawdown of the Project
Loan or the date that is six months from execution of the Bridge Finance
Facility Agreement. The Bridge Finance Facility Agreement will bear
interest at the Cdn dollar LIBOR rate plus 7.5%
per annum.
In consideration for the
provision of the Bridge Finance Facility, the Company has agreed to pay
Macquarie certain fees customary for such facility and the Borrower will
grant to Macquarie a "European" gold call option for
5,000 ounces of gold at a strike price at the higher of US$1,000 per
ounce and the spot gold price on the date upon which all conditions
precedent to the first drawdown of the Bridge Finance Facility are met,
with an option expiry date of 36 months.
The feasibility finance facility of US$3.0 million
arranged with Macquarie in 2008 and which is currently outstanding will be
repaid from the proceeds of the Project Loan.
SilverCrest Mines Inc. is a
"Silver Focused" exploration and development company with a
portfolio of high grade silver and gold deposits and exploration properties
located in Mexico and El Salvador. This property portfolio, which includes
reported probable reserves and indicated and inferred silver and gold
resources and substantial exploration potential, provides an important base
from which SilverCrest can develop its corporate
objective of becoming a significant silver and
gold asset based company. The Company's immediate initiative is to acquire
and develop substantial silver and gold resources and ultimately to operate
high grade silver and gold mines throughout North, Central and South
America.
This news release contains
forward-looking statements, which address future events and conditions,
which are subject to various risks and uncertainties. The Company's actual
results, programs and financial position could differ materially from those
anticipated in such forward-looking statements as a result of numerous
factors, some of which may be beyond the Company's control. These
factors include: the availability of funds; the timing and content of work
programs; results of exploration activities and development of mineral
properties, the interpretation of drilling results and other geological
data, the uncertainties of resource and reserve estimations, receipt and
security of mineral property titles; project cost overruns or unanticipated
costs and expenses, fluctuations in metal prices; currency fluctuations;
and general market and industry conditions.
Forward-looking statements are based on the
expectations and opinions of the Company's management on the date the
statements are made. The assumptions used in the preparation of such
statements, although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking statements.
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