Colossus Minerals Inc. announced that it expects to receive CAD 25 million in funding Arias Resource Capital Management LP and other investors.
The loan will consist of the funds lending up to an aggregate amount of CAD 4,000,000 comprised of a CAD 2,000,000 commitment by the funds and a back-stop commitment for an additional CAD 2,000,000 in the event the company is unable to find other lenders. The loan will have a maturity date of three months from the closing date. Interest will accrue at an annual rate of 20% and will be payable at the option of the company in common shares of the company unless the note holders do not approve the note holders' resolutions, in which case the interest will be paid in cash. The company will also issue an aggregate of 12,500,000 warrants to the investors pro rata on each draw down of the loan. Each such warrant will have an exercise price equal to the share price of the company on the closing date and will be exercisable for five years from that date. The loan is expected to be funded on December 27, 2013. The Company may not draw down on the loan until Sandstorm Gold Ltd. has entered into a binding term sheet relating to the Sandstorm Amendment Agreement. The tranche of the units will be contingent upon the implementation of the proposed amendments to the notes contemplated by the note holders resolutions and execution of the Sandstorm amendment agreement. The transaction is subject to the regulatory approval.