Cambridge Mineral - Update on financing arrangements
Cambridge Mineral Resources plc / Ticker: CMR / Index: AIM / Sector: Mining & Exploration
Cambridge Mineral Resources plc ('CMR' or 'the Company')
Update on financing arrangements
Cambridge Mineral Resources plc, the AIM listed mining exploration and production company primarily
targeting precious metals in South America, announces that amendments have been made to certain terms
of its existing financing arrangements for the development of its gold mine projects in Colombia.
These financing arrangements were put in place to fund the development of up to three of CMR's gold
mine projects in Colombia ('the Mines'), including the Quintana Gold mine which commenced production
on 9 November 2008.
The arrangements, which take the form of a Prepayment Agreement ('the Agreement') dated 31 December
2007, provide for the lender ('the purchaser') to make available to the Company up to a maximum of
US$ 15 million in aggregate for the Mines with such financing to be spread across three prepayments.
CMR is obliged to make available to the purchaser, gold, or the cash equivalent, over a period of
approximately 36 months following each mine start.
The proceeds from the first prepayment, totalling US$5.5 million, were used to bring the Quintana
gold mine into production, and to identify two additional CMR gold mine projects, which are currently
progressing towards feasibility study stage.
In respect of the first prepayment, CMR was to make a total of 11,750 ozs gold available to the
purchaser, representing approximately 25% of estimated total production during the term.
Under the terms of the Agreement, each prepayment is to be accompanied by the grant of warrants in
the Company, equivalent upon exercise to 15% of the Company's issued share capital for the first
prepayment, 10% for the second prepayment and 5% for the third prepayment. The warrants, in respect
of the first prepayment, were to be granted at an exercise price of 3.75p, and warrants in respect of
the subsequent prepayments were to be granted at the same percentage premium to the market price as
that of the first prepayment (a 25 per cent. premium).
On 10 March 2008 the Company held a General Meeting in which shareholders approved the increase in
share capital required to grant the warrants under the above terms for the first prepayment.
Since then the Company has granted the warrants relating to the first prepayment. It has also
brought its first mine, Quintana, into production in November 2008. As previously announced, the
development of Quintana has taken longer than expected mainly due to adverse weather conditions. In
addition, the cost of development increased by US$500,000 to US$6,000,000 due primarily to adverse
currency fluctuations between the US Dollar and the Colombian Peso, the cost of which was funded by
the purchaser and added to the first prepayment.
As a result of the foregoing, CMR has agreed to provide the purchaser with a revised total of 13,691
ounces of gold and to extend the delivery term under the first prepayment to 39 months. In addition,
the purchaser has requested that the exercise prices of any warrants to be granted upon subsequent
prepayments be amended to be at the closing mid-market price of the Company's shares as at the date
of signing any such further prepayment arrangement rather than at a 25 per cent. premium to the then
market price. The Company has agreed to this request subject to approval by shareholders, such
approval to be sought at a general meeting that will be held no later than 1 May 2009. The purchaser
has also stated that should shareholders not approve the proposed amendments to the exercise prices
of the warrants then such non-approval will be deemed to be an event of default entitling the
purchaser to terminate the Agreement. CMR is not obliged to enter into further prepayment
arrangements with the purchaser beyond the first prepayment which has already been drawn down.
** ENDS **
For further information, visit www.cambmin.co.uk or contact:
Colin Andrew Cambridge Mineral Resources plc +44 (0) 20 7663 5618
Managing Director candrew@iol.ie
Michael Burton Cambridge Mineral Resources plc +44 (0) 20 7663 5618
Finance Director mburton@cambmin.co.uk
Gavin Burnell / Ruegg & Co Limited +44 (0) 20 7584 3663
Roxane Marffy
Colin Rowbury Religare Hichens Harrison plc +44 (0) 20 7382 7771
Tom Beattie Haywood Securities (UK) Limited +44 (0) 20 7031 8018
Victoria Thomas St Brides Media & Finance Ltd +44 (0) 20 7236 1177
Notes to Editor
Cambridge Mineral Resources plc is an AIM listed mining and exploration company focussed on becoming
a producer of precious metals with an output equivalent to 100,000 oz gold per annum. Primarily
targeting precious metals in South America, its strategy is to acquire established resources at
advanced stage exploration or near term production and develop them to economically mineable reserves
through further exploration. The Company has a portfolio of mineral projects at varying stages of
commercialisation including its two key projects, the Quintana gold mine in Colombia, which commenced
production in November 2008, and the Rasuhuilca silver-gold mine in Peru. The Company also has a
portfolio of assets in Europe, which it is currently in the process of seeking to divest through
either joint-venture or sale.
Cambridge Mineral Resources Plc
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