TSX.V: AMO
VANCOUVER,
Jan. 8, 2014 /CNW/ - Altan Rio
Minerals Limited ("Altan Rio" or the "Company") announces that
the European Bank for Reconstruction and Development ("EBRD") has
agreed to provide equity financing to the Company for the
furtherance of the Company's Mongolian operations.
EBRD has 61 shareholders (59 Governments and 2
International Institutions) and invests in 29 countries from
central Europe to central
Asia.
EBRD is the largest institutional investor in
Mongolia. Mongolia became an EBRD country of operations
in October 2006 and since the
beginning of its operations in Mongolia, the EBRD has committed through debt
and equity investments more than US$ 684
million to the Mongolian private sector through 52 projects
in sectors ranging from banking to manufacturing and from mining to
agribusiness.
Mr Evan Jones,
President & CEO of Altan Rio
commented:
"We are delighted to have attracted a partner of
the calibre of EBRD."
"As shareholders will be aware, the ability for
junior explorers such as Altan Rio
to raise capital to fund ongoing activities is somewhat limited in
the current market environment. As such, by entering into this
agreement, Altan Rio has
substantially reduced financing uncertainty."
EBRD has agreed to purchase, on a private
placement basis, 16,666,000 common shares of the Company at a price
of $0.06 per share as a first tranche
subscription (the "First Tranche Subscription") pursuant to a
larger potential investment referred to hereafter.
The First Tranche Subscription is made by EBRD
pursuant to a Subscription Agreement and Framework Agreement (the
"Financing Agreements") entered into between EBRD and the Company.
Under the Financing Agreements, EBRD has committed to invest a
minimum of $5,000,000 (subject to
certain limitations as referred to hereafter) and a maximum of
$10,000,000 to purchase common shares
of Altan Rio under the First Tranche
Subscription and a series of subsequent private placements in
minimum tranches of $1,000,000 each
("Subsequent Tranche Subscriptions"). Each Subsequent Tranche
Subscription will be triggered by a notice from the Company
requesting funds and providing certain other required information.
The size of each tranche will be dependent on the amount requested
by the Company and agreed to by EBRD, with the price per share to
be subject to agreement between the parties based on the market
price for the Company's shares at the time and the requirements of
Exchange policies.
The First Tranche Subscription is subject to a
number of conditions precedent including among other things:
- Exchange approval,
- the conversion of loans made to the Company by certain of its
principals and non-related parties into shares of the Company,
and
- the Company obtaining certain required government documentation
in connection with its continuing exploration activities in
Mongolia.
Each Subsequent Tranche Subscription will be
subject to a number of conditions precedent including among other
things:
- Exchange approval,
- any necessary shareholder approvals being obtained,
- outside investors having subscribed for common shares of the
Company at least equal in number to the number of shares to be
purchased by EBRD, at the same subscription price,
- the continued compliance by the Company with the Financing
Agreements and the agreed business plan, and
- EBRD's total shareholding in the Company following the
Subsequent Tranche Subscription not exceeding 35% of the Company's
issued and outstanding shares.
The Financing Agreements also provide for the
Company to adhere to an agreed business plan with respect to its
ongoing exploration activities in Mongolia, to report quarterly and annually to
EBRD with respect to ongoing operations, and to obtain EBRD's
consent to certain material changes in the Company's business,
material corporate reorganizations and certain other material
events including outside equity financings. The Financing
Agreements also require certain principal shareholders of the
Company to maintain a threshold shareholding in the Company and to
make specified time and work commitments to the Company's affairs.
EBRD also has participation rights with respect to future proposed
debt and equity financings. EBRD is entitled to appoint a director
to the Company's Board and to appoint a non-voting observer to
attend Board meetings. Certain of the foregoing obligations are
subject to EBRD holding at least 5% of the Company's shares or a
minimum investment of $5,000,000.
The proceeds from the First Tranche Subscription
in the sum of approximately $1,000,000 will be employed to advance the
Company's exploration activities in Mongolia and to provide working capital.
The transaction is subject to Exchange
approval.
About Altan
Rio
Altan Rio, founded in 2007, is based
in Vancouver BC, Canada. Using innovative exploration targeting
techniques and leveraging long-term in-country experience, the
company explores large-scale gold and copper projects in
Mongolia, one of the world's most
prospective mineral regions. The Company's license holdings in
Mongolia, which total more than
103,341 hectares (255,361 acres), contain significant zones of
newly identified primary gold and copper mineralization across a
very large area of unexplored ground.
On behalf of Altan Rio Minerals Limited,
"Evan Jones"
Evan Jones, President &
CEO
This press release may contain forward
looking statements including those describing Altan Rio's future plans and the expectations of
management that a stated result or condition will occur. Any
statement addressing future events or conditions necessarily
involves inherent risk and uncertainty. Actual results can differ
materially from those anticipated by management at the time of
writing due to many factors, the majority of which are beyond the
control of Altan Rio and its
management.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Altan Rio Minerals Limited