|
Cline Extends Loan Agreement With Mitsui |
 |
 |
 |
|
Thursday, 22 July 2010 11:23 |
Cline Mining Corporation (TSX: CMK) (“Cline” or the “Company”) announced that it has agreed with Mitsui Matsushima International Pty. Ltd. (“Mitsui”) to a one year extension of the Cline-Mitsui Loan Agreement dated July 18, 2008 for CDN$19 million.
The extended principal repayment will be subject to an interest rate of 12% per annum calculated annually and will mature on July 25, 2011 (“Maturity Date”). Cline will pay the interest accrued to July 25, 2010 in accordance with terms of the July 18, 2008 Loan Agreement.
The main terms of the Extension Agreement include the following: firstly, Cline has the right to prepay the loan and any accrued and unpaid interest at any time from time to time, without penalty, before the Maturity Date; additionally, Mitsui has the option to convert up to CDN$19 million of the principal balance of the loan into shares of Cline Mining Corporation at the price of CDN$1.50 per share, subject to the approval of the Toronto Stock Exchange; further, Cline will repay Mitsui $2.0 million of the Principal amount of the Debt by December 31, 2010, and commencing in January 2011, the Company will repay Principal amounts of the Debt in amounts equal to ten percent (10%) of the proceeds from the sale of coal from its New Elk Coal Mine each month.
The proceeds from the Mitsui loan for CDN$19 million were used for the acquisition of the New Elk Coal Mine, located in Las Animas County, Colorado, U.S.A. The mine is now in development, on schedule and on budget for first production of high quality metallurgical coking coal in Q4 of 2010, proceeding to 3 million tons annually. Cline’s New Elk Coal Mine has a measured and indicated coal resource of 315 million tons of in-place coal as documented in the 2008 Behre Dolbear independent NI 43-10 Technical Report.
In addition to its coal resource the coal mine assets include a coal preparation plant, product coal silos, buildings, surface real estate, conveyor systems, electrics, underground workings with mine portal access from the plant site, mine permit and a permitted coal refuse disposal site. For an update on mine progress and permitting, please see Cline’s News Release dated July 14, 2010.
The New Elk Coal Mine is accessed directly by paved highway from the town of Trinidad, southern Colorado. Employment levels at the mine have reached 60 people, at least half of which have been hired locally.
About Cline: Cline has significant metallurgical coal property interests in British Columbia, Canada and in Colorado, U.S.A. with NI 43-101 compliant independent Technical Reports. Cline Mining Corporation is a mine development company focused on the exploration and development of metallurgical steel making coals in Canada and the U.S., iron ore in Madagascar and the Cline Lake Gold Mine Property in northern Ontario, Canada. |
