VANCOUVER, Oct. 21, 2019 /CNW/ - Orla Mining Ltd. (TSX:
OLA) ("Orla" or the "Company") is pleased to announce that the
Company has entered into a Commitment Letter with Trinity Capital
Partners Corporation ("Trinity Capital") with respect to a secured
project finance facility of up to US$125
million ("Facility") for the development of the Camino Rojo
Oxide Gold Project located in Zacatecas,
Mexico. The Facility is being arranged by Trinity Capital
and will include a syndicate of lenders led by Pierre Lassonde, Agnico Eagle Mines Limited
("Agnico Eagle") and Trinity Capital, creating key alignment
between debt and equity holders that will support the Company's
development going forward.
"Following a comprehensive selection process, led by our Chief
Financial Officer Etienne Morin, and
supported by our independent advisors Cutfield Freeman & Co.,
some of our key shareholders have re-iterated their support by
agreeing to provide Orla with a simple and flexible debt facility,
the proceeds of which will be used for the development of our first
mine. We appreciate the interest of other debt providers, ranging
from conventional banks to streaming companies and alternative debt
funds, who were willing to support the Orla team and were eager to
be part of our company's growth," stated Jason Simpson, President and Chief Executive
Officer.
In connection with the Commitment Letter, Mr. Lassonde, Agnico
Eagle and Trinity Capital have collectively committed to provide an
initial tranche of an aggregate of US$25
million, which Orla may draw, at its option, prior to final
syndication and completion of definitive documentation relating to
the Facility and prior to final receipt of required mine permits.
This initial advance will provide Orla with the flexibility to
order long lead items and maintain an efficient construction
schedule. The balance of the Facility will be available subject to
the completion of definitive documentation, the satisfaction of
certain conditions precedent and syndication ("Closing"), which is
being arranged by Trinity Capital.
The Facility also provides key features sought by Orla through
its solicitation process: a simple debt instrument with limited
financial covenants, including a flexible structure allowing for
early drawdown, pre-payment of principal and competitive pricing.
Entering into this Commitment Letter demonstrates strong support
from Orla's current key shareholders. Trinity Capital's in-depth
knowledge of the Camino Rojo project is expected to result in an
expedited timeline to Closing.
Key terms of the Facility will include:
- Term of 5.0 years.
- Up to US$125 million, with an
early drawdown option:
US$25 million is committed and,
subject to satisfaction of certain conditions precedent, will be
available for drawdown prior to Closing at Orla's option.
Two subsequent tranches of US$50
million each, available for drawdown upon Closing and after
satisfaction of conditions precedent, including the receipt of key
permits required for the development of Camino Rojo.
- Interest rate of 8.8% per annum.
- 32.5 million common share purchase warrants to be issued to the
lenders on Closing, with an exercise price of C$3.00 per warrant, representing a 97% premium to
the closing price of Orla on October 18,
2019, and a 7-year term.
- Principal repayment at maturity with no scheduled amortization:
Orla can prepay the loan, in full or in part, at any time during
the term, without penalty, with cash flow from operations.
- No mandatory hedging, production payments, offtake, streams or
royalties are required.
The Facility will include standard and customary project finance
terms and conditions with respect to fees and conditions precedent
to Closing (including satisfaction of remaining customary due
diligence and other approvals) and remains subject to the
completion and execution of definitive loan documentation. The
issuance of securities under the terms of the Facility is subject
to regulatory approvals. Closing of the transaction is expected
during the fourth quarter of 2019.
Cutfield Freeman & Co. provided independent advisory
services to Orla in connection with the Facility with Cassels Brock & Blackwell LLP acting as
legal counsel.
About Orla Mining Ltd.
Orla is developing the Camino Rojo Oxide Gold Project, an
advanced gold and silver open-pit and heap leach project, located
in Zacatecas State, Central
Mexico. The project is 100% owned by Orla and covers over
200,000 hectares. Estimated Mineral Reserves as of June 24, 2019 are 44.0 million tonnes at a gold
grade of 0.73 grams per tonne ("g/t") and a silver grade of 14.2
g/t, for total mineral reserves of 1.03 million ounces of gold and
20.1 million ounces of silver. (Comprised of Proven Mineral
Reserves of 14,595,000 tonnes at 0.79 g/t gold and 15.1 g/t silver
and Probable Mineral Reserves of 29,424,000 tonnes at 0.70 g/t gold
and 13.7 g/t silver). The technical report entitled "Feasibility
Study, NI 43-101 Technical Report on the Camino Rojo Gold Project —
Municipality of Mazapil, Zacatecas,
Mexico" dated June 25, 2019 is
available on SEDAR under the Company's profile as well as on Orla's
website at www.orlamining.com. Orla also owns 100% of the Cerro
Quema Project located in Panama
which includes a near-term gold production scenario and various
exploration targets. The Cerro Quema Project is a proposed open pit
mine and gold heap leach operation. Please refer to the "Cerro
Quema Project - Pre-feasibility Study on the La Pava and Quemita
Oxide Gold Deposits" dated August 15,
2014, which is available on SEDAR.
On behalf of the Board of Directors
Multilateral Instrument 61-101
Mr. Lassonde has beneficial ownership of, control or direction
over, directly or indirectly, more than 10% of the issued and
outstanding common shares of the Company and accordingly, the
Facility and the issuance of the warrants insofar as they involve
Mr. Lassonde constitute a related party transaction for the
purposes of Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). The Company is not required to obtain a formal valuation
for the Facility by virtue of section 5.4 of MI 61-101. In
addition, the Company is relying on the exemption from the formal
valuation and minority approval requirements of MI 61-101 set out
in section 5.5(a) and section 5.7(a) of MI 61-101 as the fair
market value of the Facility and the warrants insofar as it relates
to interested parties is not more than 25% of market
capitalization.
Forward-looking and Cautionary Statements
This news release contains certain "forward-looking
statements" within the meaning of Canadian and United States securities legislation,
including, without limitation, statements with respect to the
Facility, including the proposed terms thereof, the timing for
Closing of the Facility, the receipt of all required approvals for
the Facility, commitment and syndication of the balance of the
Facility, expected use of proceeds of the Facility, results of the
feasibility study, including but not limited to the mineral
resource and mineral reserve estimation, mine plan and operations,
internal rate of return, sensitivities, taxes, net present value,
potential recoveries, design parameters, operating costs, capital
costs, production data and economic potential; the timing and costs
for production decisions; financing timelines and requirements,
including the timing and the amount to be secured relating to the
Facility; permitting timelines and requirements; requirements for
additional land; exploration and planned exploration programs, the
potential for discovery of additional mineral resources; upside
opportunities including pit wall angles, land agreements, the
development of the sulphide mineral resource and exploration
potential; timing for start of engineering work, construction, and
receipt of permits; timing for first gold production; and the
Company's objectives and strategies. Forward-looking statements are
statements that are not historical facts which address events,
results, outcomes or developments that the Company expects to
occur. Forward-looking statements are based on the beliefs,
estimates and opinions of the Company's management on the date the
statements are made and they involve a number of risks and
uncertainties. Certain material assumptions regarding such
forward-looking statements are discussed in this news release,
including without limitation, assumptions regarding the ability to
enter into a definitive agreement regarding the Facility;
syndication of the Facility; price of gold and silver; the accuracy
of mineral resource and mineral reserve estimations; the loan
amount to be received upon closing of the Facility; that there will
be no material adverse change affecting the Company or its
properties; that all required permits and approvals will be
obtained; that social or environmental issues might exist, are well
understood and will be properly managed; and that there will be no
significant disruptions affecting the Company or its properties.
Consequently, there can be no assurances that such statements will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Forward-looking statements involve significant known and unknown
risks and uncertainties, which could cause actual results to differ
materially from those anticipated. These risks include, but are not
limited to: failing to enter into a definitive agreement with
respect to Engineering, Procurement and Construction Management;
failing to enter into a definitive agreement with Trinity Capital
or failing to receive commitments or syndicate the balance of the
Facility; risks related to uncertainties inherent in the
preparation of feasibility studies, drill results and the
estimation of mineral resources and mineral reserves, including
changes in the economic parameters; risks relating to not securing
agreements with third parties or not receiving required permits;
risks associated with executing the Company's objectives and
strategies, including costs and expenses, as well as those risk
factors discussed in the Company's most recently filed management's
discussion and analysis, as well as its annual information form
dated March 28, 2019, available
on www.sedar.com. Except as required by the
securities disclosure laws and regulations applicable to the
Company, the Company undertakes no obligation to update these
forward-looking statements if management's beliefs, estimates or
opinions, or other factors, should change.
SOURCE Orla Mining Ltd.