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Trading Symbol: "EGD: TSV.V"
VANCOUVER, Feb. 14, 2017 /CNW/ - Energold Drilling Corp.
("Energold" or "the Company") is pleased to announce that it has
entered into a binding term sheet with Extract Advisors LLC
("Extract"), a New York and
Toronto-based natural resources
investment fund manager, for a $20
million, secured convertible loan ("Convertible Loan").
Extract, through funds it manages, has agreed to finance
$15 million principal amount of the
Loan and the balance will be provided by a syndicate of lenders to
include existing debenture holders, new investors and insiders of
the Company, who have agreed to finance $2.25 million of the Loan.
Energold intends to use the proceeds to repay its current loans
including $13.5 million of secured
convertible debenture due July 2017,
as well as credit facilities with Royal Bank and Export Development
Canada.
The Loan will have a term of 60 months, provided that 75% of the
outstanding principal amount will be repaid within thirty-six (36)
months, will carry an interest rate of US LIBOR plus 750 basis
points, increasing to LIBOR plus 1,100 basis points during the last
24 months of the term, and with LIBOR to have a floor of 200 basis
points, payable monthly. The Convertible Loan will be
convertible into common shares of the Company, in whole or in part,
at the sole discretion of the lenders, at a conversion price of
$0.85 per share. Conversion of the
Loan into common shares, and the exercise of the warrants described
below, will be subject to a restriction such that Extract's
holdings will not, at any time, exceed 15.0% of the outstanding
voting shares of the Company.
Energold will also issue 4,000,000 warrants, with a term of 60
months, as part of the $20 million
financing that will be distributed to all investors on a pro-rata
basis. The warrants will be exercisable for one common share at an
exercise price of $1.50. In addition,
Energold will issue to certain funds managed by Extract, 100,000
warrants with a term of 36 months that will be exercisable for one
common share at an exercise price equal to the Conversion Price
under the Loan.
In connection with the financing, Extract will be entitled to
nominate one member to the board of directors of the Company
pursuant to the terms of nomination rights agreement with Energold
and Extract will serve as the Agent for the lenders. Extract will
be paid an arrangement fee equal to 3% of the amount of the loan
financed by certain funds managed by Extract.
To secure the obligations of the Company under the Loan,
Energold had agreed to provide perfected senior, first ranking
security interest in all assets of the Company with the exception
of those assets already in place to secure certain loans and lease
commitments.
Closing of the financing is expected on or before March 31, 2017 and is subject to the satisfaction
of customary commercial lending conditions precedent, receipt of
required consents from and agreements with certain existing lenders
to the Company, and the receipt of applicable regulatory approvals,
including approval of the TSX Venture Exchange.
Energold Drilling Corp. is a leading global specialty drilling
company that services the mining, energy, water, infrastructure and
manufacturing sectors in approximately 25 countries.
Specializing in a socially and environmentally sensitive approach
to drilling, Energold provides a comprehensive range of drilling
services from early stage exploration to mine site operations for
all commodity sectors and has an established drill rig
manufacturer, Dando Drilling International, based in the
United Kingdom. Energold also
holds 6.98 million shares of IMPACT Silver Corp., a silver producer
in Mexico.
On behalf of the Directors of Energold Drilling Corp.,
"Frederick W. Davidson"
President, CEO
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.
Forward-Looking Statement Caution: Some
statements in this news release contain forward-looking
information. These statements include, but are not limited to,
statements with respect to the satisfaction of the conditions
precedent to the completion of the proposed financing and the
intended use of proceeds. These statements address future events
and conditions and, as such, involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the statements. Such factors include, among others, the inability
of the Company, Extract and certain of the Company's existing
lenders to settle the terms and conditions of the definitive
financing documentation and other matters necessary to satisfy the
conditions precedent to the closing, the effects of general
economic conditions, a reduction in the demand for the Company's
drilling services, the price of commodities, changing foreign
exchange rates, actions by government authorities, the failure to
find economically viable acquisition targets, title matters,
environmental matters, reliance on key personnel, the ability for
operational and other reasons to complete proposed activities and
work programs, the need for additional financing and the timing and
amount of expenditures. 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. Except to the extent required by applicable
securities laws and the policies of the TSX Venture Exchange, the
Company undertakes no obligation to update these forward-looking
statements if management's beliefs, estimates or opinions, or other
factors, should change. The reader is urged to refer to the
Company's reports, publicly available through the Canadian
Securities Administrators' System for Electronic Document Analysis
and Retrieval (SEDAR) at www.sedar.com for a more complete
discussion of such risk factors and their potential
effects.
SOURCE Energold Drilling Corp.