December 20, 2017 – Vancouver, BC – Trek Mining Inc. (TSX-V: TREK) (“Trek Mining” or “the Company”) is pleased to announce that it has entered into a definitive credit agreement through its wholly-owned Canadian subsidiary, Aurizona Goldfields Corporation, with Sprott Private Resource Lending (Collector), L.P. (“Sprott”) to provide a US$85 million (C$109 million) secured project credit facility (the “Credit Facility”) that will be used for the development, construction and working capital requirements of the Company’s Aurizona Gold Mine (“Aurizona”) located in Brazil.
“With the Credit Facility now in place and the Equinox Gold merger set to close this week, construction of Aurizona is fully funded,” said Christian Milau, CEO of Trek Mining. “We expect to announce the approval of full-scale construction when the new Equinox Gold Board of Directors meets in January and remain on track to pour gold at Aurizona by late 2018.”
Key Terms of the Credit Facility •Term of 5 years
•US$85 million in principal ?First advance of US$15 million has been made
?Subsequent tranches available to the Company on satisfaction of customary conditions
•Interest at 7% plus the greater of 3-month US LIBOR or 1% ?50% of interest costs capitalized to the principal until May 31, 2019
•Repayable in quarterly instalments from September 2019 to September 2022 with a six-month extension election to March 2023
•2.5% arrangement fee payable pro-rata on drawdown of each tranche
•No requirement for hedging commitments or reserve accounts
•Penalty-free repayment of outstanding principal and interest after September 2019
•8,000,000 warrants to be issued to Sprott with a five-year term and an exercise price of C$1.01
•Fixed US$20 per ounce production-linked payment on 75% of the first 400,000 ounces with payments to be financially settled monthly after the start of production
In addition to the Credit Facility, Sprott has agreed to provide up to US$200 million to fund future development projects and acquisitions (the “Development and Acquisition Facility”), which could include development of the Castle Mountain project. The Development and Acquisition Facility is subject to, among other items, negotiation, documentation and approval by Sprott’s investment committee.
Trek Mining was advised by Endeavour Financial and Blake, Cassels & Graydon LLP.
On Behalf of the Board of Trek Mining Inc.
CEO & Director