Vancouver, BC / TheNewswire / April 25th, 2017 - Montan Mining Corp. (TSXv: MNY | FSE: S5GM | SSE: MNYC) ("Montan" or the "Company") is pleased to announce that that it has entered into a binding term sheet with Cartesian Royalty Holdings Pte. Ltd. ("CRH") for a financing package of up to USD $10 million to fund the acquisition of Kairos Capital Peru S.A.C. and M&S Transportes y Servicios Generales S.R.L, including the Mirador processing plant (together, "Mirador"), as announced on February 16, 2017; and to bring Montan's 100%-owned Cerro Dorado gold processing plant into full commercial production and increase its capacity.
The Term Sheet provides that CRH will invest in three (3) tranches, each with a specified use of proceeds, as well as additional tranches at the discretion of CRH. Each tranche will be structured in a 25% equity / 75% stream ratio.
Streaming Investment Terms: For each USD $1.0 million in streaming investment, CRH is to receive 2,500 ounces of gold or gold equivalent from Montan, payable over a maximum of 50 months from closing. Repayment of each streaming investment is to commence six (6) months after drawdown over a repayment period of 42-months, subject to two (2) months of optional payment holidays whereby Montan can defer its monthly payment. Each exercised payment holiday must be separated by at least 6 months.
Equity Investment Terms: The Montan units are priced at a 20% discount to the VWAP of Montan common shares for the 30-day calendar day period immediately preceding the Term Sheet; each unit will consist of one common share and one common share warrant; the warrant will have an exercise price of a 25% premium to the VWAP with a term of five (5) years subject to TSX-V approval or other regulatory constraints.
The initial tranche ("Tranche 1") investment of USD $3.0 million is intended for the acquisition of Mirador (see Montan press release dated February 16, 2017) and will be comprised of USD $2.25 million as a secured streaming investment in Montan and USD $0.75 million as an equity investment in Montan. Conditions to closing Tranche 1 include:
- Satisfactory completion of due diligence by CRH on Montan, Mirador, Cerro Dorado, and the Kairos and Cerro Dorado SAC holding companies;
- Montan's raising at least USD $1.0 million for optimization CAPEX and working capital at Mirador
- Development of an operating plan in consultation with CRH including all necessary permits to execute the operating plan; and
- Long-term contracts at Mirador totaling no less than 70% of plant capacity.
Subsequent tranches are subject to satisfactory post-acquisition performance at Mirador, and are expected to comprise two (2) tranches to bring the Cerro Dorado plant into commercial operation and to increase its capacity to 125 tonnes per day.
Net smelter returns royalty ("NSR"): Upon closing of Tranche 1, Montan will provide CRH with a two percent (2.0%) NSR on the Mirador and Cerro Dorado plants and such other concessions, JV properties and mines that accrue to Kairos SAC or Cerro Dorado SAC; and any future assets acquired, in whole or in part, with CRH funds. 0.5% of the NSR can be purchased by Montan at any time for USD $750,000. Montan would also have a right of first offer on any sale of the NSR by CRH to a third party.
In addition CRH will have the right to appoint a non-executive director to Montan's Board of Directors for as long as the streaming investment is outstanding or CRH owns more than 5% of Montan.
"Cartesian's tailored financing solution should allow Montan to complete the purchase of the Mirador Plant and bring Cerro Dorado into commercial production shortly thereafter. We are excited at the prospect of having two assets in production before Q4 2017. We are grateful to Cartesian for their approach and the flexibility shown on the basis of project specific needs and our risk-balanced cash flow projections", stated Luis Zapata, Executive Chairman of Montan.
Peter Yu, Director of CRH stated, "Montan is a unique diversified mineral processing project with strategic locations throughout Peru and is permitted for production. We are confident the Montan team will create substantial value for its stakeholders, as well as artisanal miners in Peru through their efficient and transparent business model".
The CRH financing is subject to the approval of the TSX Venture Exchange.
ABOUT CRH
CRH offers innovative financing structures with the goal of creating long-term growth and value in world-class gold projects around the globe. CRH is an affiliate of Cartesian Capital Group, LLC, a global private equity firm with proven expertise in assisting closely-held companies develop into global market leaders. Cartesian Capital Group manages more than US$2.4 billion in capital and has offices in New York, Sao Paulo, Shanghai, Warsaw, and Bermuda.
For more information, please visit the website at http://www.cartesianroyalty.com
ABOUT MONTAN MINING
Montan Mining is an emerging precious metals producer focusing on monetizing mining assets in Peru. The Company is is the 100% owner of the operation ready Cerro Dorado gold processing plant permitted to 125 TPD and the adjoining Rey Salomon gold mine in the southern Peruvian mining district of Arequipa; and and is completing the acquisition of the Mirador plant near Chimbote, dirstrict of Ancash. Montan Mining has an experienced management team with diverse technical, market, and finance expertise and is supported by committed and sophisticated investors focused on building value for the long term.
For more information, please visit the corporate website at http://www.montanmining.ca.
