First Stage of Proposed $15,000,000 Financing Package With Waterton Global
in response toby
May 3rd, 2010: Gryphon Gold starts Borealis drilling...
March 20, 2012 16:23 ET
CARSON CITY, NEVADA--(Marketwire - March 20, 2012) - Gryphon Gold Corp. (TSX:GGN)(OTCBB:GYPH), a gold exploration, production and development company focused on its Borealis project in Nevada, announced today that it had entered into a $1.5 million Bridge Loan Agreement (the "Bridge Loan") with Waterton Global Value, L.P. Gryphon Gold will draw down on the bridge loan to fund its working capital and fund the operations of the Borealis property. The Bridge Loan bears interest at 15% p.a. and is secured by a first charge on the assets of Gryphon Gold and its subsidiary, Borealis Mining Company. The Bridge Loan is repayable on the earlier of May 19, 2012 and the completion of a senior secured credit facility with Waterton Global Value, L.P. Gryphon Gold has entered into a non binding letter of intent with Waterton Global Value, L.P. in respect of a $15 million senior secured gold stream credit facility (the "Senior Facility"). Completion of the Senior Facility is subject to, among other things, documentation and due diligence.
Gryphon Gold has obtained the consent of more than 66 2/3% of the holders (in value) of its $3 million 10% subordinated secured notes due July 28, 2012 and of its $4.5 million 10% subordinated secured notes due November 22, 2012 (the "Notes") to amend the relevant trust indentures to allow Gryphon Gold to proceed with the Bridge Loan and Senior Facility, subject to repayment of the Notes upon draw down of the Senior Facility.
The holders of the Notes (the "Noteholders") have also consented to the subordination of the Notes to the Bridge Facility. In connection with their approval, Gryphon Gold has agreed to issue to the Noteholders an aggregate of 15 million share purchase warrants exercisable at a price of $0.164 for a period of eighteen months. Gryphon Gold wishes to thank the Noteholders for their ongoing support.
In connection with the Bridge Loan, Gryphon Gold has entered into a Gold and Silver Supply Agreement with Waterton Global Value, L.P., pursuant to which Waterton Global Value, L.P. has a right to acquire the gold and silver production from the Borealis property based on market rates. The Gold and Silver Supply Agreement is subject to termination in the event Waterton Global Value, L.P. elects not to provide the Senior Facility to Gryphon Gold.
Gryphon Gold has issued to Waterton Global Value, L.P. an aggregate of 1.5 million warrants in connection with the Bridge Loan. These warrants have a term of 3 years and are exercisable at a price of C$0.1862.