September 21, 2011 09:12 ET
Trevali Announces $40.0 Million Offering of 5-Year Convertible Senior Unsecured Debentures by Way of a Short Form Prospectus
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 21, 2011) -
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Trevali Mining Corporation ("Trevali" or the "Company") (TSX:TV)(OTCQX:TREVF)(FRANKFURT:4TI)(BVLAC:TV) is pleased to announce that it has filed a preliminary short form prospectus with the Securities Commissions in each of the Provinces of Canada in connection with an offering (the "Offering") of C$40 million principal amount of 5-year convertible senior unsecured debentures (the "Debentures"). The Offering will be conducted through a syndicate of underwriters led by Raymond James Ltd. and including GMP Securities L.P., Scotia Capital Inc., M Partners Inc. and Paradigm Capital Inc. (collectively, the "Underwriters").
The Company will grant the Underwriters an over-allotment option to purchase up to C$6.0 million aggregate principal amount of Debentures to cover over-allotments and for market stabilization purposes, exercisable in whole or in part at any time up to 30 days after the closing of the Offering. The net proceeds of the Offering will be used for construction expenditures at the Halfmile Property and the Santander Property, to repay principal and interest on an outstanding loan in the amount of US$8.4 million to Cardero Resource Corp., to prepare, if required, a mill feasibility study at the Halfmile-Stratmat Property, to engage a preliminary economic assessment at the Ruttan Property, and for general working capital purposes.
Convertible Debenture Highlights
The coupon and conversion price will be determined in the context of the market;
Interest rate payable semi-annually in arrears on October 31st and April 30th;
Five year term;
Redemption right after 3 years;
The conversion price will be adjusted (the "Conversion Adjustment") as follows:
the conversion price will be decreased by 500 basis points (e.g. if the conversion premium was set at 30%, the Conversion Adjustment would result in a 25% conversion premium) in the event the Company does not receive by December 31, 2011 all necessary permits from the appropriate government agencies to permit the Company to commence mining the Halfmile Property in New Brunswick; and
the conversion price will be decreased by 500 basis points if the Company does not receive by August 31, 2012 all necessary permits from the appropriate government agencies to permit the Company to commence mining and milling at the Santander Property in Peru;
Issue price of C$1,000 per Debenture and will be listed for trading on the Toronto Stock Exchange; and
Trevali has certain restrictions on additional debt issuances.
Trevali's CEO and President Mark Cruise stated, "We are pleased with the announcement of this financing that enables Trevali to complete final development and mine construction at both Halfmile in New Brunswick and Santander in Peru. The Company greatly looks forward to making its transition from an explorer to producer over the upcoming months, and providing investors with one of the few new opportunities on the TSX for exposure to the zinc-lead-silver sector following the recent M&A activity that has resulted in the takeovers of Farallon Mining and Breakwater Resources over the past several months."
The financing is expected to close on or about October 13, 2011, subject to certain conditions, including regulatory approval and approval the Toronto Stock Exchange. The Debentures are direct senior unsecured obligations of the Company and rank equally and rateable with each other and all other present and future senior and unsecured indebtedness of the Company and senior in right of payment to any subordinated indebtedness of the Company. The Debentures are subordinated to all existing and future secured indebtedness to the extent of any collateral.
The Debentures will not be redeemable before October 31, 2014. On or after October 31, 2014 and prior to the maturity date, the Company, may, at its option, subject to providing not more than 60 days and not less than 30 days prior notice, redeem the Debentures, in whole, or, from time to time, in part at par plus accrued and unpaid interest provided that the weighted average trading price of the common shares on the TSX during the 20 consecutive trading days ending five trading days preceding the date on which the notice of redemption is given is not less than 145% of the Conversion Price.