Yukon-Nevada closes $20-million (U.S.) Au forward deal
Ticker Symbol: C:YNG
Yukon-Nevada closes $20-million (U.S.) Au forward deal
Yukon-Nevada Gold Corp (C:YNG)
Shares Issued 930,644,301
Last Close 2/7/2012 $0.44
Wednesday February 08 2012 - News Release
Mr. Wolfgang Seybold reports
YUKON-NEVADA GOLD CORP. CLOSES $20 MILLION FORWARD GOLD PURCHASE AGREEMENT WITH DEUTSCHE BANK
Yukon-Nevada Gold Corp. has entered into a forward gold purchase agreement with Deutsche Bank AG, London branch. Deutsche Bank has financed a $20-million (U.S.) prepaid gold forward facility to Queenstake Resources USA, Inc., a wholly owned subsidiary of the company.
The company will use the proceeds for working capital and to further invest in the expansion of the SSX-Steer mine as it ramps up to 1,200 tons per day and to commence development of Starvation Canyon, including portal construction and equipment purchases, as part of the 2012 plan to commence production from that site at the company's Jerritt Canyon mine in Nevada.
The facility is a forward contract structured to deliver 27,950 ounces of gold over a 43-month term in the amount of 650 ounces per month starting March 31, 2012. The 27,950 ounces of gold that have been committed under this gold facility represent approximately 3.90 per cent of the gold reserves or 0.90 per cent of the total gold resources at Queenstake's wholly owned Jerritt Canyon property in Nevada, United States.
The gold pricing valuation has been finalized and subsequent to the receipt of the $20-million (U.S.) prepayment, which represents an initial prepayment of approximately $716 per ounce, the remainder of the purchase price for the gold will be paid to Queenstake upon completion of the monthly gold deliveries to Deutsche Bank and will be equal to the amount that the gold price exceeds $850 (U.S.) up to a maximum gold price of $1,750 (U.S.).
In connection with the transaction, the company has issued to Deutsche Bank one share purchase warrant, which can be exercised to purchase 40 million common shares at a price of 44 cents per share on or before Feb. 7, 2015.
Under the terms of the agreement, in the event that the actual monthly quantity of gold delivered by the company is less than the scheduled monthly amount, the shortfall can be made up, at the option of Deutsche Bank, by the issuance of common shares of the company. The conversion price per share will be the five-day volume-weighted average price of the company's shares as traded on the Toronto Stock Exchange immediately prior to the monthly delivery date for the scheduled delivery month in which such gold shortfall payment obligation arises, less the discount as permitted by the TSX.
In accordance with securities legislation currently in effect, the shares, the warrant and the warrant shares will each be subject to a hold period of four months plus one day from the date of issuance of the aforesaid securities. In the case of the warrant and the warrant shares, the hold period will expire on June 8, 2012.
We seek Safe Harbor.
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