VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sep 25, 2013) - Elgin Mining Inc. ("Elgin Mining" or the "Company") (ELG.TO)(TSX:ELG.WT) is pleased to announce that, further to its news release of August 27, 2013, it has completed the bridge loan credit facility (the "Facility") with Sprott Resource Lending Partnership (the "Lender").
The Facility is for the principal amount of $5 million at an interest rate of 10 percent per annum, compounded and payable monthly. The term of the Facility is eighteen months, at which time the Facility will be due and payable in full. In consideration for the advance of the Facility, the Company has made a bonus payment in cash to the Lender in the amount of $350,000, being 7% of principal amount. In consideration for the structuring and syndication of the Facility, the Company has paid to the Lender a cash structuring fee of $50,000. The proceeds of the Facility will provide the Company with additional liquidity to continue development of the Company's Bjorkdal Mine in Sweden and to fund working capital and general and administrative costs.
As a result of the fact that the Lender is an affiliate of an insider of the Company and that a director of the Company will participate in the syndication of the Facility, the Facility is considered a "related party transaction" pursuant to Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101"). The transaction is exempt from the requirements to obtain a formal valuation, pursuant to Section 5.5(a) of MI 61-101, and minority shareholder approval, pursuant to Section 5.7(a) of MI 61-101, as the fair market value of the Facility and any consideration paid by the Company in connection with it, will not exceed 25% of the Company's market capitalization.
The Facility was considered and approved by the board of directors of the Company, other than the director who will participate on syndication of the Facility and who abstained from such approval.
Elgin Mining Inc.
Elgin Mining is a Canadian based company focused on production at the Björkdal gold mine in Sweden. In addition, Elgin Mining's portfolio includes the Lupin and Ulu gold projects located in Nunavut, Canada.
For further information, please visit the Company's web site at www.elginmining.com.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking statements, including any information as to the Company's use of proceeds of the Facility, its ability to repay said Facility, its strategy, plans or future financial or operating performance. Forward-looking statements are characterized by words such as "plan," "expect", "budget", "target", "project", "intend," "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.
These factors include risks relating to variations in the mineral content within the material identified as mineral reserves and mineral resources from that predicted, changes in development or mining plans due to changes in logistical, technical or other factors, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices and currency exchange rates, possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company's corporate resources, changes in project parameters as plans continue to be refined, changes in project development and production time frames, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, successful completion of proposed acquisitions, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation and labour disputes as well as those risk factors discussed or referred to in the Company's Annual Information Form dated March 22, 2013, a copy of which is filed on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the exploration and development plans and objectives and may not be appropriate for other purposes.