Quest Successfully Completes Transactions, Rebrands as Sprott Resource Lending Corp.
08 September 2010 - 10:30PM
Marketwired
Sprott Resource Lending Corp., formerly Quest Capital Corp. (TSX:
QC)(NYSE Amex: QCC) (the "Corporation" or "Sprott Resource
Lending"), today announced it has successfully completed all steps
necessary to rebrand itself as Sprott Resource Lending Corp. with a
new lending strategy providing bridge and mezzanine lending to the
natural resources sector.
To complete the transaction, Sprott Inc. and its affiliates
(including its employees and clients) ("Sprott") made a private
placement investment in the Corporation valued at $25 million or
$1.60 per share which represents approximately 10% of the current
and issued common shares of the Corporation. The definitive
partnership agreement and management services agreement were also
executed between Sprott Resource Lending and Sprott Lending
Consulting LP. Copies of the definitive agreements will be
available under the corporate profile of the Corporation on the
System for Electronic Document Analysis and Retrieval (SEDAR) at
www.sedar.com and on the website of the U.S. Securities and
Exchange Commission (SEC) at www.sec.gov.
As part of the transaction, Peter Grosskopf was appointed
President and Chief Executive Officer of the Corporation, replacing
Brian Bayley. A. Murray Sinclair was re-appointed as Chairman of
the Corporation while Jim Grosdanis was re-appointed as Chief
Financial Officer. "Today marks the beginning of an exciting future
for the shareholders of Sprott Resource Lending, which has the
capital, deal flow access, risk management policies and execution
expertise to capitalize on the vast and unmet need in natural
resources for access to credit," said Peter Grosskopf, President
and CEO. "Speaking on behalf of the full Sprott organization, I
pledge our full commitment to capitalizing on our collective
strengths and the outstanding potential that we can realize through
our specialized form of sector-specific lending."
The timing of the rebranding is considered exceptionally
favourable. The combination of natural resource sector growth,
global contraction in bank financing, low short-term interest rates
and trading discounts to spot commodity-based net asset values of
many resource companies has created a powerful opportunity to
originate high quality loans, achieve attractive spreads and
negotiate lucrative bonus arrangements which will add incremental
profitability to Sprott Resource Lending's core activities.
As at September 7, 2010, Sprott Resource Lending has
approximately $100 million of initial cash to commit to resource
lending and an aggressive plan to monetize the Corporation's legacy
net real estate loans of approximately $160 million that should
liberate additional cash for resource lending purposes.
"Sprott Resource Lending is starting from a position of strength
and the successful execution of real estate loan monetization will
add to our momentum," said Jim Grosdanis, Chief Financial Officer.
"We are very clearly focused on achieving our stated objectives,
including generating superior yields on capital and remaining
under-levered."
New Trading Symbol and Website
Subject to final regulatory approval, Sprott Resource Lending
will begin trading on the TSX and NYSE AMEX under the trading
symbols SIL and SILU, respectively on or about September 10, 2010.
In addition, the Corporation's website, www.questcapcorp.com, will
be changing over the course of the next few days.
Dividend Policy
Consistent with previously announced plans, the Corporation will
look to establish an initial dividend policy providing for the
payment of an annual dividend in a percentage equal to the average
30-year Government of Canada bond interest rate for the relevant
year. This policy will be initiated shortly before the end of
December 2010.
About Sprott Resource Lending Corp.
Sprott Resource Lending specializes in bridge and mezzanine
lending to precious and base metal mining, exploration and
development companies and oil and gas companies on a global basis.
Headquartered in Toronto, the Corporation seeks to generate income
from lending activities as well as the upside potential of bonus
arrangements with borrowers generally tied to the underlying
property or shares of the borrower.
Sprott Resource Lending was founded by Quest Capital Corp. and
Sprott Lending Consulting Limited Partnership. Sprott Lending
Consulting LP is a wholly owned subsidiary of Sprott Inc., the
parent of Sprott Asset Management LP (www.sprott.com), a leading
Canadian independent money manager.
Sprott Resource Lending continues to meet the requirements of a
mortgage investment corporation and intends to do so for the
remaining taxation year.
For more information about Sprott Resource Lending, please visit
SEDAR (www.sedar.com).
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This press release may include certain statements that
constitute "forward-looking statements", and "forward looking
information" within the meaning of applicable securities laws
("forward-looking statements" and "forward-looking information" are
collectively referred to as "forward-looking statements", unless
otherwise stated). Such forward-looking statements involve known
and unknown risks and uncertainties that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by such forward looking statements. Forward-looking
statements may relate to the Corporation's future outlook and
anticipated events or results and may include statements regarding
the Corporation's future financial position, business strategy,
budgets, litigation, projected costs, financial results, taxes,
plans and objectives. We have based these forward-looking
statements largely on our current expectations and projections
about future events and financial trends affecting the financial
condition of our business. These forward-looking statements were
derived utilizing numerous assumptions regarding expected growth,
results of operations, performance and business prospects and
opportunities that could cause our actual results to differ
materially from those in the forward-looking statements.
While the Corporation considers these assumptions to be
reasonable, based on information currently available, they may
prove to be incorrect. Forward-looking statements should not be
read as a guarantee of future performance or results.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events, and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward looking statements. To the extent any
forward-looking statements constitute future-oriented financial
information or financial outlooks, as those terms are defined under
applicable Canadian securities laws, such statements are being
provided to describe the current potential of the Corporation and
readers are cautioned that these statements may not be appropriate
for any other purpose, including investment decisions.
Forward-looking statements speak only as of the date those
statements are made. Except as required by applicable law, we
assume no obligation to update or to publicly announce the results
of any change to any forward-looking statement contained or
incorporated by reference herein to reflect actual results, future
events or developments, changes in assumptions or changes in other
factors affecting the forward looking statements. If we update any
one or more forward-looking statements, no inference should be
drawn that we will make additional updates with respect to those or
other forward-looking statements. You should not place undue
importance on forward-looking statements and should not rely upon
these statements as of any other date. All forward looking
statements contained in this press release are expressly qualified
in their entirety by this cautionary notice.
Contacts: Sprott Resource Lending Corp. Peter Grosskopf
President and CEO 416.365.7172 Sprott Resource Lending Corp. A.
Murray Sinclair Chairman 604.687.8378 Sprott Resource Lending Corp.
Jim Grosdanis CFO 416.943.4698 www.sprott.com
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