THE BOURSE WHISPERER: Cleveland Mining Company (ASX: CDG) has signed a $10 million Investment Facility with Boston-based Investment Manager, Baycrest Capital.
The facility provides Cleveland with the ability to draw down funds at its discretion over a three year term, providing well-priced capital that will facilitate the further development of the company’s Brazilian portfolio.
Cleveland said it was pleased to have flexible access to capital through Baycrest, particularly in the current climate where obtaining finance in the resource sector is proving difficult.
“The Facility shows solid support for Cleveland’s continuing development,” Cleveland Mining managing director David Mendelawitz said in the company’s announcement to the Australian Securities Exchange.
“We are set apart from other juniors in that we are a gold producer with multiple options to further expand our production and resource supply base.
“This new source of funding gives the company confidence to continue its Brazilian development, which includes the optimisation of the Premier JV Mine and plans to start mining at the nearby and soon to be gazetted, O Capitão deposit.
Baycrest director, Douglas Leighton said his company was excited to be able to provide the financing for Cleveland Mining through the Investment Facility and that Baycrest looks forward to a long relationship with the company and its management.”
Key Terms of the Investment Facility include:
A limit of $10m based on individual tranches of up to $500,000 each, or any such amount agreed between the parties;
Each draw-down will be matched by an issue of ordinary shares priced at 100 per cent of a weighted average market price formula;
The facility provides Cleveland with the right, with no obligation, to draw down on the facility. The
company is free to assess its optimal funding sources going forward and is not bound by minimum periodic draw-downs; and
An initial 2 per cent fee paid in Cleveland shares on the total funding commitment and a 5 per cent commission fee for each tranche drawn.
Baycrest Capital is an investment management firm managed by Dutchess Capital, that provides finance to public companies.
The Investment Facilities provided by Dutchess are a flexible financing structure by which publicly traded companies can raise capital quickly, efficiently and with less dilution than most traditional offerings.