The mine and for working capital
The TSX-listed miner on Wednesday took delivery of a $25-million tranche of the $35-million prepay facility from Lascaux Resource Capital Fund 1, which Fortune used to fund the acquisition of the remaining interest in the RSM.
The second tranche of $10-million was expected to close on October 16, which Fortune would use to settle amounts owing to the previous owner of the mine, fund capital improvements to the mine and for working capital.
“Our ability to arrange financing and close this purchase of the RSM in a challenging capital market is a testament to our team. We look forward to completing the changeover of operations and are delighted to welcome the employees of the mine to Fortune as we continue with the ramp up to 400 t/d and cash flow from operations,” Fortune president and CEO Robin Goad said.
Fortune had entered into an amending agreement with the current owners of the RSM and related assets, including Silver Star Resources, Star Mine Operations and Revenue-Virginius Mines Corporation to acquire the assets under more attractive terms.
Under the latest agreement, Fortune paid the vendors $15.5-million from the proceeds of Tranche 1 of the Lascaux facility. The company had agreed to pay a further $3-million when it received the second tranche and 17.74-million Fortune common shares, which would be issued pending shareholder approval.
Before the amendment, Fortune was required to pay the vendors $10-million after receiving the second tranche of the Lascaux facility. The agreement was amended to make funds available for the capital improvements to the mine and for working capital.
Fortune had also changed its agreement with the vendors and RVM Holdings, the previous owner of the mine, under which it paid $4-million to RVM from the proceeds of Tranche 1 of the Lascaux facility, instead of two instalments of $1.5-million due on Wednesday and $3-million due on October 1, 2015, collectively totalling $4.5-million.