Yukon-Nevada Gold Corp. Raises $59,328,000 by
Exercise of Warrants and Private Placement
Vancouver,
BC � May 24, 2011 � Yukon-Nevada Gold Corp. (TSX: YNG; Frankfurt Xetra Exchange: NG6)(the �Company�)is pleased to announce an update on its financing
activities. All amounts are in Canadian funds except where noted.
Exercise of Share
Purchase Warrants
Further to the Company�s news release of March 10, 2011 wherein the Company
advised that shareholders approved a resolution to reduce, for a limited
time, the exercise prices of the Company�s unlisted share purchase
warrants, the 30 day period for the reduction concluded on April 13, 2011
with 59,054,083 warrants exercised during the said 30 day period, for gross
proceeds $12,490,381.
Subsequent to the expiry of the deadline for the discounted exercise price,
Orifer S.A., a major shareholder, assisted the
Company by agreeing to transfer its current warrant holdings for nominal
consideration to a number of institutional investors including Deutsche
Bank AG, London Branch, (�Deutsche Bank�).
The Orifer warrants entitle the holders to
purchase up to 140,400,000 shares of the Company at the price of $0.32 per
share at any time up to January 12, 2012. Orifer
agreed to transfer the warrants to Deutsche Bank and the other
institutions, subject to documentation and final agreement and any other
regulatory approvals required by applicable securities laws,on the condition that the warrants are exercised
immediately. Deutsche Bank has agreed to exercise 80,000,000 warrants
for gross proceeds of $25,600,000. Other institutional investors have
agreed to exercise an additional 60,400,000 warrants for gross proceeds of
$19,328,000.
Private Placement
The Company is also pleased to announce that the Company has negotiated a
$14,400,000 private placement to sell to Deutsche Bank 33,488,372 units at
a price of $0.43 per unit. Each unit consists of one common share in
the capital stock of the Company (the �Shares�) and one warrant (the
�Warrants�). Each Warrant will have a 24 month term and is
exercisable for one Share at an exercise price of $0.55. The Warrants
are subject to accelerated expiry, at the option of the Company, in the
event that the ten-day volume weighted average trading price of the
Company�s shares equals or exceeds $0.90 per share for ten consecutive
trading days. There is no finder�s fee or commission payable on the private
placement. In accordance with securities legislation currently in
effect, the Shares, the Warrants and the Shares underlying the Warrants,
will be subject to a �hold period� of four months plus one day from the
date of closing of the private placement. The completion of the
private placement remains subject to documentation and final agreement, TSX
approval and any other regulatory approvals required by applicable
securities laws.
Use of Proceeds
The exercise of share purchase warrants and the closing of the private
placement will provide the Company with gross proceeds of $59,328,000,
which will be spent on capital expenditures to up-grade the Jerritt Canyon Gold Project in Nevada.
Additional Finance
Facilities
In addition to the above investment by Deutsche Bank, the Company has
received an indicative non-binding term sheet from Deutsche Bank for a Gold
Forward sale under which the Company would sell forward a portion of its
production to raise up to an additional USD120,000,000.
The terms of this facility are presently being discussed and the Company
will advise the market further if this transaction is concluded.
Primary use of these proceeds should the proposed transaction close will be
towards (but not limited to):
�
Construction of new lined tailings storage
facility as well as a secondary water storage facility to be completed
before winter 2011/12;
�
Upgrade to Digital Control Facility Monitoring
System to improve plant operating efficiencies by replacing the current
pneumatic system;
�
Installation of additional quench tank and related
items during the 2-week scheduled annual maintenance shutdown periods in
June and September 2011;
�
Complete winterization of the plant including
construction and installation of new ore drying equipment that would be
protected from climatic extremes;
�
Completion of remaining environmental obligations
as outlined in the Consent Decree with the Nevada Division of Environmental
Protection to keep our current compliance in good standing;
�
Complete the purchase of underground equipment
necessary to commence operations at the SSX/Steer underground gold mine and
continue development of the Starvation Canyon mine;
�
Investing $12M in further exploration; and
�
To fully stock and equip the Jerritt
Canyon Warehouse with spare parts for mill maintenance and repairs to
minimize future down time.
The above new
capital will allow the Company to complete its 2011/12 capital expenditure
and upgrade program which will facilitate increased mill availability and
achievement of its production milestones, the first of which will be gold
production at the annual rate of 150,000 ounces of gold per annum by end of
calendar 2011.
In addition to the mill upgrade program, the capital works program provides
for new underground equipment to allow the re-opening and operation of the
SSX-Steer underground gold mine. This will ramp up to produce an
initial 1,200 tons of ore to the mill per day, in addition to the existing
Smith Mine which has met its budgeted 1,000 tons per day since re-opening.
The Company�s own mines will then deliver approximately 2,200 tons of ore a
day at an average grade of 0.22 ounces per ton. Ore from Company
owned stock piles and ore purchased from Newmont will more than supplement
the required feed to the upgraded facility to run at 4,000 tons per day.
Yukon-Nevada Gold Corp. is a North American gold producer in the business
of discovering, developing and operating gold deposits. The Company holds a
diverse portfolio of gold, silver, zinc and copper properties in the Yukon
Territory and British Columbia in Canada and in Nevada in the United
States. The Company's focus has been on the acquisition and development of
late stage development and operating properties with gold as the primary
target. Continued growth will occur by increasing or initiating production
from the Company's existing properties.
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