Palladon Ventures-CML Update
February 03 2011 - 3:08PM
Marketwired
Palladon Ventures Ltd. (TSX VENTURE: PLL) ("Palladon" or the
"Company") announces the following update from Dale Gilbert, CEO of
CML Metals Corporation.
CML Metals Shareholder Update
Dear Shareholder,
I am pleased to provide an update concerning our financing and
plant construction.
Financing
On Monday, January 31st CML closed the first $20mm tranche of a
two-tranche, $45mm loan with Credit Suisse. The first tranche is
fully collateralized by $20mm of the approximately $25.6mm cash the
company raised from its shareholders in December of 2010 and
January of 2011. The proceeds of the first tranche will be used to
fund capital expenditures related to the construction of the
concentrate plant. The $25mm second tranche and the $20mm of cash
collateral backing the first tranche will be released to fund the
remaining capital expenditure required to construct the plant upon
the company meeting certain conditions, precedent to closing,
including the production of an Independent Engineer's report
satisfactory to Credit Suisse, in its sole discretion. The company
hopes to close the second tranche of the facility in the second
quarter of 2011.
The terms of the facility include an interest rate equal to the
following: a) between the closing of the facility and the earlier
of: the funding of the second tranche, or the maturity of the first
tranche (in the event the second tranche fails to close)- LIBOR +
3%; b) between the closing of the second tranche and the completion
of the concentrate plant (including a ramp-up period)- LIBOR + 6%;
c) thereafter- LIBOR + 5%. In the event the second tranche closes,
the facility shall begin amortizing in the second half of 2012 with
a final maturity date of January 2015. In the event the second
tranche fails to close, the first tranche will mature on June 30,
2012.
Plant Construction
We continue to make substantial progress at CML as we begin to
realize our goal of completing a 2mm ton per year concentrate
facility at Iron Mountain. Construction has already commenced on
the site, with earthwork being completed in preparation for the
start of building construction in the forthcoming weeks. The
building itself has been purchased and has entered into the final
design and manufacturing process. Equipment procurement has started
with the purchase of a SAG Mill (Semi-Autogenous Mill), the primary
grinding mill in the plant and longest-lead time component, and
RFQ's have been issued for most other major components.
The addition of Credit Suisse as a partner to our project is an
exciting development and one that further validates all the hard
work the CML team has put into this project the past year. The
company is proud to be working with world class partners and their
involvement in the project gives us even greater credibility in the
industry. We'd also like to thank our financial advisors, RK Equity
Advisors for arranging and structuring the financing. RK Equity
remains on retainer with the company as we seek to close the second
tranche of the Credit Suisse facility and as continued financial
advisors to the company.
Thank you for your continued support.
Dale Gilbert, CEO, CML Metals Corporation
John Cutler, CEO of Palladon, commented: "CML continues to make
good progress at Iron Mountain. In support of the CML debt
financing, both Luxor and Palladon have pledged all of their CML
shares as security under the credit agreement."
About Palladon Ventures Ltd.
Palladon Ventures Ltd. holds a significant minority interest in
CML Metals Corporation, which is focused on advancing the Iron
Mountain project, an iron ore mine located west of Cedar City,
Utah.
Disclaimer for Forward-Looking Information:
Certain statements in this release are forward-looking
statements, which reflect the expectations of management.
Forward-looking statements consist of statements that are not
purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future, including
but not limited to the commencement of shipping under CML's offtake
agreement and future anticipated shipping volumes thereunder,
pricing for the run-of-mine iron and the potential construction and
financing of a concentrate facility. Such statements are subject to
risks and uncertainties that may cause actual results, performance
or developments to differ materially from those contained in the
statements. No assurance can be given that any of the events
anticipated by the forward-looking statements will occur or, if
they do occur, what benefits the Company will obtain from them.
These forward-looking statements reflect management's current views
and are based on certain expectations, estimates and assumptions
which may prove to be incorrect. A number of risks and
uncertainties could cause our actual results to differ materially
from those expressed or implied by the forward-looking statements,
including: (1) a downturn in general economic conditions in North
America and internationally; (2) the inherent uncertainties and
speculative nature associated with mineral exploration and
production; (3) a decreased demand for minerals; (4) any number of
events or causes which may delay or cease exploration and
development of the Company's property interests, such as
environmental liabilities, weather, mechanical failures, safety
concerns and labor problems; (5) the risk that the Company does not
execute its business plan; (6) inability to retain key employees;
(7) inability to finance operations and growth; and (8) other
factors beyond the Company's control. These forward-looking
statements are made as of the date of this news release and, except
as required by law, the Company assumes no obligation to update
these forward-looking statements, or to update the reasons why
actual results differed from those projected in the forward-looking
statements.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Palladon Ventures Ltd. John W. Cutler CEO 801.521.5252
604.681.4760 (FAX) info@palladonventures.com
www.palladonventures.com
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