SEAFIELD RESOURCES EXECUTES $16.5M DEBT FACILITY WITH RMB RESOURCES INC.
Thursday, February 21, 2013
Toronto, Ontario, February 21, 2013 – Seafield Resources Ltd. (“Seafield” or “the Company”) (TSX-V: SFF) is pleased to announce that it has executed an agreement with RMB Australia Holdings Limited ("RMB") for a CAD $16.5 million loan facility ("Facility"), arranged by RMB Resources Inc., the resource financing division of the FirstRand Group of South Africa. The use of proceeds is to fully fund the bankable feasibility study (“BFS”) for the Company’s Miraflores Deposit and general corporate purposes.
In November 2012, the Company commenced its current ongoing exploration program on the Miraflores advanced-stage gold deposit, which is part of the Company’s Quinchía Gold Project, located in the Risaralda Department of Colombia. The Facility provides the incremental financing the Company requires to complete the Miraflores BFS by the end of Q4 2013.
- Debt term of 3 years at LIBOR plus 7.0% per annum;
- Warrants issued to RMB to purchase up to 33,000,000 common shares of the Company for 36 months at C$0.10 per common share, subject to TSX Venture Exchange approval;
- Security interests granted to the lender, which include a first ranking charge over the Quinchía Gold Project and a pledge of the securities and assets of Seafield Resources Ltd. and Minera Seafield S.A.S;
- Pre-payment at any time without penalty or from proceeds of project financing post BFS;
You take what you can get. This should be good for, maybe , a year and a half, if all goes well. Now that the market has opened it also helped to push the stock up a little bit, 3 cents with volume threatening to exceed a two year high of about 3 mln. shares. The all time high volume was about 70 mln. shares in a day.
P.S At the end of the day slightly more than 5 mln shares had traded in a range of 10 to 13 cents and closing at 11 cents, a single cent gain for receiving this lifeline. What seems to be clear is that, should the company meet with success, that is, should the exploration results indeed be “bankable”, then the warrants (and others issued to key personnel, 3 mln plus ) will be exercised and hang like a millstone around this company’s neck. At a stock price of, say, $1.10 this would up the cost by $36 mln. of proceeding. Sounds like the proverbial rock vs hard place situation.