Palladon Ventures Enters Into Letter Agreement With Luxor Capital Partners, LP
05 Décembre 2009 - 4:46AM
Marketwired
Palladon Ventures Ltd. ("Palladon" or the "Company") (TSX VENTURE:
PLL)(FRANKFURT: PV-1) is pleased to announce that effective
immediately the Company and Luxor Capital Partners, LP ("Luxor")
have entered into a letter agreement (the "Letter Agreement"),
subject to TSX Venture Exchange approval, to the extension
agreement dated June 26, 2009 and to the standstill agreement dated
October 15, 2009.
The Letter Agreement grants Palladon an irrevocable option (the
"Payment Option") to acquire from Luxor the entirety of its
outstanding loans including interest, currently equal to
approximately $39.4 million (the "Loan Amount"), by paying $30
million on or before March 31, 2010.
In the event that the Company does not exercise the Payment
Option on or before March 31, 2010, Luxor has agreed to reduce the
then outstanding $41 million Loan Amount to $25 million, in
exchange for transfer and assignment by the Company of 50% of the
equity of Palladon Iron Corporation to Luxor (the "Luxor Equity"),
subject to terms and conditions to be set out in a definitive
agreement. Palladon Iron Corporation is Palladon's wholly owned
subsidiary, through which it is pursuing development of the Iron
Mountain Project, an iron ore deposit located in southwest Utah,
USA.
The $25 million Loan Amount will then bear interest at the rate
of three-month LIBOR plus 5%, with a minimum rate of 8%. At
Palladon's option, all or any portion of the interest due on any
interest payment date may be paid by adding such interest to the
principal amount, with such unpaid interest accruing interest from
such Interest Payment Date at the foregoing rate and being treated
for all purposes as principal.
Furthermore, in the event that Palladon does not exercise the
Payment Option on or before March 31, 2010, it shall have a
three-year option to purchase 50% of the Luxor Equity for $18.75
million.
Palladon will use its best efforts to secure the required
financing by the March 31, 2010 deadline. With the execution of the
Letter Agreement the Company plans to raise a minimum of $1 million
to fund ongoing operations and to continue advancing the Iron
Mountain project on a number of fronts.
Palladon CEO John Cutler stated: "We are pleased to have reached
this agreement with Luxor Capital whereby we have a clear path
forward, the opportunity to retire the Luxor Loans at a significant
discount and move forward with no debt on the balance sheet. By
quantifying a firm repurchase price, this Letter Agreement allows
Palladon to communicate a clear capital structure to investors
interested in funding the Payment Option. The Company will announce
its plan to fund the Payment Option as soon as is practicable."
On Behalf of the Board of Directors,
John W. Cutler, President and Chief Executive Officer
About Palladon
Palladon Ventures Ltd. is a junior resource company 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 regarding:
(1) Palladon will use its best efforts to secure the required
financing by the March 31, 2010 deadline and (2) Palladon's plans
to raise a minimum of $1 million to fund ongoing operations and to
continue advancing the Iron Mountain project on a number of fronts.
Forward-looking statements consist of statements that are not
purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future. 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 labour 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, (8) other factors beyond the Company's control; and (9) the
risk that the Company will not be able to raise funds due to Luxor
Capital Group. 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 President &
CEO 801.521.5252 801.521.5454 (FAX) info@palladonventures.com
www.palladonventures.com
Palladon Ventures Ltd. (TSXV:PLL)
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