Sep 11, 2017 @ 08:16
Monarques is pleased to announce that it has entered into a definitive agreement with Richmont Mines Inc. pursuant to which Monarques will acquire all of Richmont’s mining assets in Québec. The assets acquired consist of all of Richmont’s mineral claims, mining leases and mining concessions, including the Beaufor mine, Chimo, Monique and Wasamac properties and all the issued and outstanding shares of Usine Camflo Inc., as well as all mills, buildings, structures, equipment, inventory and property.
In consideration, Monarques will issue a number of shares equating to 19.9% of its undiluted issued and outstanding common shares. The number of shares will be calculated immediately following the closing of the Transaction and will include the shares issued in connection with the private placement of subscription receipts subscribed to by Richmont.
In addition, Monarques will assume responsibility for the future amount payable to the Ministry of Energy and Natural Resources for the Beaufor mine, Camflo mill and Monique mine rehabilitation plans, estimated at approximately $5 million, should the facilities be closed.
Lastly, the following net smelter return royalties will be payable by Monarques to Richmont:
- 1.5% for the Wasamac property, of which 0.5% can be bought back for $7.5 million;
- 1.0% on Richmont’s claims in the Camflo property; and
- 1.0% on the Beaufor property once Monarques has produced 100,000 ounces of gold, subsequent to the close of the Transaction.
1) $6,525,251 million private placement of subscription receipts
Monarques has closed a non-brokered private placement of 15,786,431 subscription receipts priced at $0.35each for gross proceeds of $6,525,251. Each receipt will be exchangeable without further consideration or action for one common share of the Corporation at the close of the Transaction. Richmont subscribed for $2.0 million of receipts, the Fonds de solidarité FTQ subscribed for $1.0 million and Probe Metals Inc. subscribed for $0.6 million.
The receipts and underlying securities issued pursuant to the private placement will be subject to a hold period of four months and one day. Richmont’s interest in Monarques will also be subject to a one-year lock-up provision.
The Fonds de solidarité FTQ is a development capital investment fund that channels the savings of Quebecers into investments. As at May 31, 2017, the organization had $13.1 billion in net assets, and through its current portfolio of investments has helped create and protect 186,440 jobs. The Fonds is a partner in more than 2,700 companies and has 645,664 shareholder-savers. Please visit fondsftq.com for more information.
2) US $4 million credit facility with Auramet International LLC
Monarques intends to close a senior secured gold loan agreement with Auramet International LLC providing the Corporation with access to a US $4 million credit facility. Auramet and Monarques have entered into a definitive Term Sheet, due diligence has been completed and the parties are currently documenting the loan. The loan will be repaid in 12 installments of ounces of gold commencing on October 31, 2017, and expiring on September 30, 2018, inclusive. The total number of ounces will be calculated based on the gold price at the closing of the agreement. The loan will be guaranteed by the Corporation’s subsidiaries, namely X-Ore Resources, Beacon Gold Mill Inc. and Camflo Mill Inc.
3) Sale of the Courvan property to Probe Metals
Finally, the Corporation has signed an agreement with Probe Metals which will see Monarques sell its full interest in the Courvan property in consideration for a cash payment of $400,000. This transaction will be completed following the close of the Transaction with Richmont.
“This transformative transaction is a major milestone for Monarques, positioning the Company to achieve the coveted status of gold producer,” said Jean-Marc Lacoste, President and Chief Executive Officer of Monarques. “We are very pleased to have Richmont as a significant shareholder, and we look forward to benefitting from their long history and experience as a successful underground gold miner. We are also extremely pleased to welcome Monarques’ 150 future employees, with whom we look forward to having a successful and rewarding relationship with. Monarques will have a much larger profile following the transaction, with a strong portfolio of mining assets in the Abitibi that includes the Beaufor Mine, the Camflo and Beacon mills, the Wasamac and Croinor Gold advanced projects, and eight other high-quality exploration projects. Furthermore, we will be well positioned financially to move forward with expanding our gold production and developing our mineral resources for the benefit of our shareholders.”
These transactions are expected to close on or about September 30, 2017, and are subject to customary closing conditions, including regulatory and government approvals.