TORONTO, Feb. 19, 2020 /CNW/ - Continental Gold
Inc. (TSX:CNL; OTCQX:CGOOF) ("Continental" or the
"Company") is pleased to announce that an affiliate of Zijin Mining
Group Co., Ltd. ("Zijin") has agreed to provide up to an additional
US$50 million unsecured loan ("Loan")
to the Company. The proceeds of the Loan will be advanced in up to
three tranches, with the first US$25
million expected to be funded in the near term, prior to
closing of the previously-announced plan of arrangement (the
"Transaction") involving the Company, Zijin and 2727957
Ontario Inc. (the "Purchaser"), a wholly-owned subsidiary of
Zijin, and used to advance the construction and commissioning
of the Buriticá Project. The second advance of up to US$25 million will be funded immediately prior to
closing of the Transaction and used to pay closing costs. Any
amount not advanced as part of the first or second advance will be
advanced to the Company in a third and final tranche. Each advance
is subject to certain conditions precedent.
The Loan is unsecured, repayable on the fifth anniversary date
of closing and bears interest at 10% per annum with quarterly
interest payments. The Loan's maturity date will be accelerated in
certain circumstances, including in the event the Company's senior
secured facility is terminated. The Loan is also subject to an
early repayment fee of 2.5% and, following an event of default,
will incur interest at an additional 5% per annum.
As previously disclosed, the Transaction provides for the
acquisition by the Purchaser of the issued and outstanding common
shares of the Company ("Common Shares") by way of a statutory plan
of arrangement under the Business Corporations Act
(Ontario). Each Continental
shareholder will receive cash consideration of C$5.50 for each Common Share held.
The Transaction remains on track for closing in the first
quarter of 2020 subject to obtaining the Canadian Investment Act
approval and the Chinese State Administration of Foreign Exchange
(SAFE) registration, and satisfying certain other closing
conditions. Following closing of the Transaction, the Common Shares
will be de‑listed from the Toronto Stock Exchange and will not be
available for trading on the Toronto Stock Exchange or the OTCQX
International.
About Continental Gold
Continental Gold is the leading large-scale gold mining company
in Colombia and is presently
developing its 100%-owned Buriticá project in Antioquia. Buriticá
is one of the largest and highest-grade gold projects in the world
and is being advanced utilizing best practices for mine
construction, environmental care and community inclusion. Led by an
international management team with a successful record of
discovering, financing and developing large high-grade gold
deposits in Latin America, the
Buriticá project is on schedule with mechanical completion
anticipated during the first quarter of 2020. Additional details on
Continental Gold's suite of gold exploration properties are also
available at www.continentalgold.com.
Forward-Looking Statements
This news release contains or refers to forward–looking
information under Canadian securities legislation, including but
not limited to statements regarding the timing of advancing funds
under the Loan, the proposed use of proceeds, the anticipated
closing of the Transaction, the timing for delisting of the Common
Shares, the development and construction of the Buriticá project,
advancing the Buriticá project, the economic effect of the mine,
and future plans and objectives of the Company, and is based on
current expectations that involve a number of significant business
risks and uncertainties. Forward–looking statements are subject to
other factors that could cause actual results to differ materially
from expected results. Readers should not place undue reliance on
forward–looking statements. Factors that could cause actual results
to differ materially from any forward–looking statement include,
but are not limited to, the possibility that the Transaction will
not be completed on the terms and conditions, or on the timing,
currently contemplated, and that it may not be completed at all,
due to a failure to obtain or satisfy, in a timely manner or
otherwise, required regulatory approvals and other conditions of
closing necessary to complete the Transaction or for other reasons,
the possibility of adverse reactions or changes in business
relationships resulting from the announcement or completion of the
Transaction, an inability to advance the Buriticá project to the
next level, failure to convert estimated mineral resources to
reserves, capital and operating costs varying significantly from
estimates, the preliminary nature of metallurgical test results,
delays in obtaining or failures to obtain required governmental,
environmental or other project approvals, political risks,
uncertainties relating to the availability and costs of financing
needed in the future, changes in equity markets, inflation, changes
in exchange rates, fluctuations in commodity prices, delays in the
development of projects and the other risks involved in the mineral
exploration and development industry. Specific reference is made to
the most recent Annual Information Form on file with Canadian
provincial securities regulatory authorities for a discussion of
some of the factors underlying forward–looking statements. All of
the forward–looking statements made in this news release are
qualified by these cautionary statements and are made as of the
date hereof. The Company assumes no responsibility to update them
or revise them to reflect new events or circumstances other than as
required by law.
SOURCE Continental Gold Inc.