American CuMo Mining Corporation Announces Proposed $25 Million Financing.

Vancouver, B.C.: American CuMo Mining Corporation (“CuMoCo” or the “Company”) (TSXV: MLY; OTCQX: MLYCF) is pleased to announce its intention to undertake a financing to raise up to US$25 million (the “Financing”) through the sale of up to 100 units (“Units”) of its subsidiary, Idaho CuMo Mining Corporation (“Idaho CuMo”), at a price of US$250,000 per Unit, with each Unit consisting of a unsecured and non-transferable promissory note in the principal amount of US$250,000 (a “Note”) and a right (the “Silver Purchase Right”) to enter into a silver purchase and sale agreement (a “Silver Purchase Agreement”) with Idaho CuMo.

The Notes would bear interest at a rate of 6% per annum, payable semi-annually on June 30 and December 31, and would have a term of 5 years. With the consent of the holder of the Note, Idaho CuMo could prepay all or any portion of the principal amount outstanding under such Note at any time, provided that any prepayment in whole or in part of the Note would cause the Silver Purchase Right to immediately expire.

The Silver Purchase Right would be exercisable by the holder within 30 days of completion of a feasibility study and decision by the Company to place its CuMo Project located in Idaho into commercial production provided that the Note had not been repaid in full or in part by the Company. Each Silver Purchase Right would, if exercised, require the purchaser to purchase and Idaho CuMo to sell to the purchaser refined silver in an amount equal to 0.5% of the silver (in any form) produced from the CuMo Project, up to a maximum of 312,500 ounces of refined silver (the “Silver Maximum”) pursuant to a Silver Purchase Agreement.

If all Units under the Financing are issued and all Silver Purchase Rights were exercised, Idaho CuMo would be required to sell up to a maximum of 31,250,000 ounces of refined silver, which silver would be deliverable from 50% of the silver produced from the CuMo Project. Upon exercise of the Silver Purchase Right, the purchaser would pay an upfront cash payment of US$250,000 (the “Deposit”) per Silver Purchase Right exercised upon execution of the Silver Purchase Agreement, which payment would be made by way of a set off against repayment of the principal amount of loans owing by Idaho CuMo to the purchaser. The Deposit would be unsecured.

The purchase price for each ounce of refined silver purchased would be comprised of (a) an ongoing cash payment (“Ongoing Payment”), being the lesser of (i) the London silver spot price and (ii) US$5/oz, subject to an inflationary adjustment; and (b) a deposit reduction amount, being the amount by which the silver spot price exceeds the Ongoing Payment, paid as a reduction to the Deposit and payable until such time as the Deposit is reduced to zero.

The term of the Silver Purchase Agreements would continue until the earlier of (i) the date on which the Silver Maximum has been delivered to the purchaser; and (ii) 40 years (subject to automatic 10-year renewals if the CuMo Project is in operation). Any uncredited balance of the Deposit at the end of a Silver Purchase Agreement’s term would be refunded to the purchaser.

The Financing is subject to TSX Venture Exchange approval and the preparation and approval by the parties of definitive legal documentation.

CuMoCo may pay a cash finder’s fee of 5%, in accordance with TSX Venture Exchange policy, in connection with the Financing. The funds raised in the Financing would be used to continue advancing the CuMo Project, including work towards an updated mineral resource estimate, preparing an updated economic analysis, expanded metallurgical testing, in-fill drilling and environmental base-line studies, as well as for general working capital purposes.

Last week, CuMoCo participated in the 119th Annual Exposition of the Northwest Mining Association, held in Reno, Nevada. Interest in the CuMo Project from participants was significant. During this time, CuMoCo entered into an agreement with Idaho-based Timberline Drilling, Inc. (“Timberline”) pursuant to which Timberline agreed to purchase all remaining drills, support equipment and inventory owned by CuMoCo. As part of their agreement, CuMoCo agreed to hire Timberline for a 50,000 foot minimum drilling contract over the next three years. With operations in the Western U.S. and Alaska, Timberline specializes in underground and surface core drilling and has drilled over 650,000 feet this year with 97%+ recovery and an industry leading safety record.

Throughout much of 2013, the CuMo Project has been undergoing a Supplemental Environmental Assessment (“SEA”) process as prescribed under the United States National Environmental Protection Act (“NEPA”). During the SEA public comment period, the project garnered support from both the Idaho Department of Commerce and Boise County Board of County Commissioners for the completion of the exploration.

CuMo Project leaders will continue working with U.S. Forest Service to support the agency’s completion of the SEA process. The Company anticipates that the SEA may be approved by mid-2014 and drilling to resume on public lands.

CuMoCo is focused on advancing its CuMo Project towards feasibility and establishing itself as one of the largest and lowest-cost molybdenum producers in the world as well as a significant producer of copper and silver. Management is continuing to build a strong foundation from which to move the Company and the CuMo Project forward.

On behalf of the Board of Directors of
American CuMo Mining Corporation

Shaun Dykes
Chief Executive Officer
For further information, contact:
Shaun Dykes, Chief Executive Officer
American CuMo Mining Corporation
Tel: (604) 689-7902

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this new release.

Forward-looking information

This release contains “forward-looking information” within the meaning of applicable Canadian securities legislation including, but not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as the Company’s current funding, and funds to be received from equipment sales, being sufficient to fund 2013 work programs at the CuMo project and corporate development.

Often, but not always, forward-looking information can be identified by the use of words such as “expects”, “estimates”, “potential”, or “believes” or describes a “goal” or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved.

Forward-looking information is based on a number of material factors and assumptions, including the result of drilling and exploration activities, that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen breakdowns, that no labour shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, that the Court will not intervene with the Company’s proposed exploration activities at the CuMo project and that laboratory and other related services are available and perform as contracted. Forward-looking information involves known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of molybdenum; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the company’s publicly filed documents. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information

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2023-02-03 12:46pm EST