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Prophecy Resource Corp. has arranged a secured debt facility of up to $10 million (the "Loan") with Waterton Global Value, L.P. ("Waterton").Â
Subject to certain drawdown conditions, the loan may be drawn down in three tranches as follows: (a) $2 million on the closing date, which occurred as at September 1, (b) $3 million on the date Prophecy completes the acquisition of Northern Platinum Ltd. (see Prophecy news release dated July 16, 2010) and (c) $5 million at such time as Prophecy completes an off-take agreement for the Ulaan Ovoo property. John Lee CEO and Co-Chairman of Prophecy, stated today that: "We are pleased to have Waterton as a new stakeholder in Prophecy. The proceeds will fully fund Ulaan Ovoo's 2010 capital expenditure to production, which includes continuing road improvement, infrastructure upgrade at the mine site and at the rail station, fleet purchase, and personnel recruits. We now also have a marketing budget to increase investor and community awareness throughout Mongolia, Asia and North America." The Loan is due by August 31, 2011 and bears interest at 10% per annum. A structuring fee of $50,000 and 1% of the third tranche (if drawn down) is payable in cash. In conjunction with the closing of the Loan, we will issue 1,000,000 common shares to Waterton. In the event that the third tranche of the Loan is drawn, the Company shall issue a further 1,000,000 common shares to Waterton. The Shares issuable to Waterton will be subject to a four month hold period. Macquarie Capital Markets Canada Ltd. acted as Financial Advisor to the Company with respect to the Loan. The Loan is subject to the approval of the TSX Venture Exchange. |
