Gran Colombia Gold Corp.(GCM.TO: News ) Friday announced a filing towards the issuance of up to US$75 million in senior unsecured silver-linked notes.
The offering would consist of up to 75,000 Notes of the company at a price of US$1,000 principal amount per Note.
The Notes, due 2018, would bear interest at a rate of 5.0% per year, payable semi-annually in arrears in equal installments on December 31 and June 30 of each year.
Holders of Notes would be entitled to receive the greater of the Principal Amount of the Note held, or the U.S. dollar financial equivalent to approximately 66.7 ounces of silver per Note, as determined using the average realized silver price by the company over the 6 month period immediately prior to any repayment or redemption of principal, representing the US dollar financial equivalent of an aggregate of five million ounces of silver.
The quantity of silver per Note was determined using a notional price of US$15 per ounce of silver, providing holders with the opportunity to benefit from silver prices in excess of US$15 per ounce.
The company is naturally hedged against the silver price through its current and anticipated silver production as a by-product to its gold mining operations.
The company, shall repay, on a pro rata basis, 10% of the total Principal Amount of the Notes outstanding on the date that is 48 months from the closing date.
Serafino Iacono, executive co-chairman of the Canadian-based gold and silver company, said " With silver currently at over US$35 per ounce, this is a unique way to invest in silver at a substantial discount to current prices."
The net proceeds of the Offering would be used by the company for the development of the Marmato Project, Colombia-based social programs related to the Marmato Project located in Colombia, the relocation of the Town of Marmato and for general corporate purposes including improvements to the Gran Colombia Mine.
The offering would consist of up to 75,000 Notes of the company at a price of US$1,000 principal amount per Note.
The Notes, due 2018, would bear interest at a rate of 5.0% per year, payable semi-annually in arrears in equal installments on December 31 and June 30 of each year.
Holders of Notes would be entitled to receive the greater of the Principal Amount of the Note held, or the U.S. dollar financial equivalent to approximately 66.7 ounces of silver per Note, as determined using the average realized silver price by the company over the 6 month period immediately prior to any repayment or redemption of principal, representing the US dollar financial equivalent of an aggregate of five million ounces of silver.
The quantity of silver per Note was determined using a notional price of US$15 per ounce of silver, providing holders with the opportunity to benefit from silver prices in excess of US$15 per ounce.
The company is naturally hedged against the silver price through its current and anticipated silver production as a by-product to its gold mining operations.
The company, shall repay, on a pro rata basis, 10% of the total Principal Amount of the Notes outstanding on the date that is 48 months from the closing date.
Serafino Iacono, executive co-chairman of the Canadian-based gold and silver company, said " With silver currently at over US$35 per ounce, this is a unique way to invest in silver at a substantial discount to current prices."
The net proceeds of the Offering would be used by the company for the development of the Marmato Project, Colombia-based social programs related to the Marmato Project located in Colombia, the relocation of the Town of Marmato and for general corporate purposes including improvements to the Gran Colombia Mine.
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