Lundin Gold Announces Us$400 Million Private Placement
Lundin Gold Inc. ("Lundin Gold" or the "Company")
(TSX: LUG, Nasdaq Stockholm: LUG) is pleased to announce a US$400
million equity private placement financing (the “Private
Placement”). The Private Placement, coupled with the recent
lenders’ commitments for a senior debt facility, substantially
completes the funding requirements, based on current estimates, for
the Fruta del Norte gold project in Ecuador (“Fruta del Norte” or
the “Project”).
Subscribers to the Private Placement include
Newcrest Mining Limited (“Newcrest”), Orion Mine Finance Group
(“Orion”), and Zebra Holdings and Investments S.à.r.l. and Lorito
Holdings S.à.r.l. (the “Lundin Family Trusts”) at a weighted
average subscription price of CAD$5.44 per common share. This
is equivalent to a 13% premium to the February 23, 2018 closing
price of CAD$4.81. The Company will be issuing an aggregate
of 93,497,140 common shares pursuant to the Private Placement,
which represents 78.1% of its current issued and outstanding
shares.
Highlights
- Newcrest and the Lundin Family Trusts will invest US$250 and
US$50 million, respectively, at a price of CAD$5.50 (US$4.33 at a
CAD/USD foreign exchange of 1.27) per common share;
- Orion will invest US$100 million at a price of CAD$5.25
(US$4.13) per common share;
- Proceeds from the Private Placement will fund the development
of Fruta del Norte;
- Newcrest will have the right to appoint two members and Orion
will have the right to appoint one member to Lundin Gold’s board of
directors, subject to certain ownership thresholds being
maintained;
- Upon closing of the Private Placement, Newcrest will own 27.1%
of Lundin Gold’s outstanding shares, the Lundin Family Trusts will
own 22.3% and Orion will own 11.4%;
- Newcrest has been granted certain investment rights customary
for a strategic investor, including anti-dilution rights allowing
Newcrest to maintain their pro rata ownership and the right to
assign three staff members to the Project so long as their
investment does not fall below certain thresholds. Orion has
also been granted certain anti-dilution rights to maintain their
pro rata ownership; and
- Newcrest will be subject to certain standstill
restrictions.
“Newcrest has extensive experience building gold
mines and bringing them into production. As our strategic
partner, their knowledge and expertise will be valuable as we
develop Fruta del Norte into a large, high-grade gold mine,” said
Ron Hochstein, President and CEO of Lundin Gold. “With the support
of Newcrest, Orion, the Lundin Family Trusts, and the recently
announced senior debt facility, our team can now focus on driving
the development of this Project to its goal of first production by
the end of 2019, on schedule and on budget.”
The Private Placement is expected to close on or
before March 31, 2018 and is subject to regulatory and other
customary approvals, including TSX approval and the filing of a
listing prospectus with the Swedish Financial Supervisory
Authority.
The Private Placement, if completed, will
materially affect control of the Company (as determined in
accordance with the TSX Company Manual) since Newcrest, at the
closing of the Private Placement, will hold greater than 20% of the
issued and outstanding shares and will become the largest
shareholder of the Company, and therefore requires Shareholder
approval under section 604(a) of the TSX Company Manual. The
Company has obtained such approval through the solicitation of
written consents in a form acceptable to the TSX as permitted under
section 604(d) of the TSX Company Manual. The threshold for
approval by way of consent is approval by beneficial shareholders
owning, in the aggregate, more than 50% of the outstanding
shares.
Exploration Earn-In
Lundin Gold and Newcrest have also signed a
binding heads of agreement to form a joint venture company to
explore eight early stage concessions held by Lundin Gold.
These concessions are to the north and south of Fruta del Norte and
exclude the large block of concessions surrounding the Fruta del
Norte deposit (see Figure 1). Newcrest can earn up to a 50%
interest in the joint venture company by spending US$20 million
over a five year period.
Under the earn-in, Newcrest is committed to
spend a minimum of US$4 million over the next two years and has the
option to spend a further US$6 million over the following 18-month
period to earn an initial 25% interest. By spending an
additional US$10 million within the five year period, Newcrest can
earn a further 25% interest. Newcrest will be the operator of
the joint venture.
Lundin Gold has engaged BMO Nesbitt Burns Inc.,
GMP Securities L.P., and Scotia Capital Inc. as financial advisors
for this transaction. Blakes, Cassels and Graydon L.L.P.
acted as legal counsel to the Company.
Conference Call and Webcast
A conference call and webcast will be held on
Monday February 26, 2018 at 7:00 a.m. EST or 13:00 CET to discuss
the Company’s news. Please call in 10 minutes before the
conference call starts and stay on the line (an operator will be
available to assist you).
Dial-In Numbers:Toll-Free North America: 1 (877)
648-7976North
America:
1 (617) 826-1698Toll-Free
Sweden:
02-079-8505Sweden:
46-(0) 8-5661-9361
Conference ID: Lundin Gold
To view the live webcast presentation, please
log on using this direct link: http://bit.ly/2EHmqzc
A replay of the webcast will be available via
the above link approximately two hours after the completion of the
conference call until 11:59 pm EST on March 12, 2018.
About Lundin Gold
Lundin Gold, headquartered in Vancouver, Canada,
is developing its wholly-owned Fruta del Norte gold project in
southeast Ecuador. Fruta del Norte is one of the
highest-grade and largest gold projects currently under
construction. The Company’s board and management team have
extensive expertise in mine construction and operations and are
dedicated to advancing this project through to first gold
production in 2019.
The Company operates with transparency and in
accordance with international best practices. Lundin Gold is
committed to delivering value to its shareholders, while
simultaneously providing economic and social benefits to impacted
communities, fostering a healthy and safe workplace and minimizing
the environmental impact. The Company believes that the value
created through the development of Fruta del Norte will benefit its
shareholders, the Government and the people of Ecuador.
Additional Information
The information in this release is subject to
the disclosure requirements of Lundin Gold under the EU Market
Abuse Regulation and the Swedish Securities Markets Act. This
information was publicly communicated at 1:30 pm Pacific Time on
February, 25 2018.
For more information, please
contact:
Lundin Gold Inc.Ron F. HochsteinPresident and
CEO+593-2-299-6400+1-604-806-3589
Lundin Gold Inc.Sabina SrubiskiManager, Investor
Relations+1-604-806-3089info@lundingold.comwww.lundingold.com
Follow Lundin Gold on Twitter
Caution Regarding Forward-Looking
Information and StatementsCertain of the information and
statements in this press release are considered “forward-looking
information” or “forward-looking statements” as those terms are
defined under Canadian securities laws (collectively referred to as
“forward-looking statements”). Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, identified by words
or phrases such as “believes”, “anticipates”, “expects”, “is
expected”, “scheduled”, “estimates”, “pending”, “intends”, “plans”,
“forecasts”, “targets”, or “hopes”, or variations of such words and
phrases or statements that certain actions, events or results
“may”, “could”, “would”, “will”, “should” “might”, “will be taken”,
or “occur” and similar expressions) are not statements of
historical fact and may be forward-looking statements.
By their nature, forward-looking statements and
information involve assumptions, inherent risks and uncertainties,
many of which are difficult to predict, and are usually beyond the
control of management, that could cause actual results to be
materially different from those expressed by these forward-looking
statements and information. Lundin Gold believes that the
expectations reflected in this forward-looking information are
reasonable, but no assurance can be given that these expectations
will prove to be correct. Forward-looking information should
not be unduly relied upon. This information speaks only as of
the date of this press release, and the Company will not
necessarily update this information, unless required to do so by
securities laws.
This press release contains forward-looking
information in a number of places, such as in statements pertaining
to the completion of the Private Placement and the use of proceeds
of the Private Placement, the adequacy of the Company’s financing,
the timing of first production, the completion of the earn-in by
Newcrest and the formation of the joint venture, the progress of
the development, construction and operation of the Project and the
timing and success of permitting and regulatory approvals.
Factors that could cause actual results to differ materially from
the Company’s expectations include, but are not limited to: risks
relating to receipt of regulatory approvals; risks that the
conditions to the completion of the Private Placement will not be
satisfied or waived; the ability to arrange financing and the
risk to shareholders of dilution from future equity financings; the
ability to maintain its obligations under its current project
financing and other debt; risks related to carrying on business in
Ecuador; volatility in the price of gold; the timely receipt of
regulatory approvals, permits and licenses; risks associated with
the performance of the Company’s contractors; risks inherent in the
development of an underground mine; deficient or vulnerable title
to mining concessions and surface rights; shortages of critical
resources, labour and key executive personnel, such as input
commodities, equipment and skilled labour, and the dependence on
key personnel; risks associated with the Company’s community
relationships; unreliable infrastructure; volatility in the market
price of the Company’s shares; uncertainty with the tax regime in
Ecuador; measures required to protect endangered species; the cost
of compliance or failure to comply with applicable laws;
exploration and development risks; the accuracy of the Mineral
Reserve and Resource estimates for the Fruta del Norte Project and
the Company’s reliance on one project; risks related to artisanal
and illegal mining; uncertainty as to reclamation and
decommissioning; risks associated with the Company’s information
systems; competition in the mining industry; the ability to obtain
adequate insurance; risks of bribery or corruption; the
potential for litigation; limits of disclosure and internal
controls; and the potential influence of the Company’s largest
shareholders.
There can be no assurance that such statements will prove to be
accurate, as Lundin Gold's actual results and future events could
differ materially from those anticipated in this forward-looking
information as a result of the factors discussed in the "Risk
Factors" section in Lundin Gold's Management Discussion &
Analysis for the financial year ended December 2017.
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