Categories: Base Metals
Topics: General Base Metals

QUADRA MINING Press Release

QUADRA MINING PROVIDES UPDATE ON FINANCING FOR CENTENARIO COPPER CORPORATION ACQUISITION AND INCREASE TO BOUGHT DEAL FINANCING

Quadra Mining Ltd. and Centenario Copper Corp. have received a signed commitment letter for $37.5-million (U.S.) from West LB in connection with a syndicated $50-million (U.S.) project loan facility to finance the development of Centenario Copper's Franke mine. Key facility details are:

 

  • Hedging requirements of 43 million pounds of copper at a minimum price of $1.75 (U.S.) over 2009 and 2010;
  • Facility comprising an amortizing $40-million (U.S.) project finance facility and a $10-million (U.S.) working capital both with a final maturity date in March, 2014;
  • Quadra Mining as sponsor and guarantor until completion;
  • Other terms and conditions customarily associated with project finance facilities including debt service, loan life and reserve life coverage ratios.

 

Quadra Mining and West LB are in discussions with the existing lending group and other lenders to complete the syndication. In the event the syndication does not complete, West LB will finance its $37.5-million and Quadra Mining would finance the $12.5-million (U.S.) difference until the syndication is completed. Quadra Mining will continue to work on finalizing loan documentation as outlined in the arrangement agreement with Centenario Copper. Completion of the facility documents are subject to Quadra Mining and Centenario Copper board approval.

Based on this, Quadra Mining is pleased to announce that one of the critical conditions of the arrangement agreement has been met.

In addition Quadra Mining is pleased to announce that, due to the positive response from the market, the common share offering, announced earlier on March 20, has been increased by an additional 2.2 million common shares. The syndicate of underwriters led by Macquarie Capital Markets Canada Ltd. and including Raymond James Ltd., BMO Capital Markets, GMP Securities LP and Paradigm Capital Inc. will now purchase 16.2 million common shares of the company at a price of $4.65 per common share for gross proceeds of $75.33-million. The company will grant the underwriters an overallotment option, to purchase up to an additional 2.43 million common shares ($11,299,500), exercisable at the offering price, at any time up to 5 p.m. (Toronto time) on the day which is 30 days following the closing date.

Paul Blythe, president and chief executive officer of Quadra Mining, says: "At the time that the arrangement agreement was agreed between Centenario and Quadra, we were contemplating a restructured project debt facility of $75-million. We have not been able, in the present debt market, to arrange a facility of this magnitude, but have, as noted above, a commitment for $37.5-million and are in negotiation for an overall facility of $50-million. The transaction at this debt level is still accretive to Quadra and enables us to continue our corporate growth strategy. The bank financing combined with the $75-million bought-deal equity financing earlier today enables Quadra to have in place the funding required for the completion and ramp-up of the Centenario project, which will add 70 million of cathode copper production to Quadra."