VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/23/13 -- Sutter Gold Mining Inc. (TSX VENTURE: SGM)(OTCQX: SGMNF) ("Sutter" or the "Company") announced today that it has closed on an agreement with RMB Australia Holdings Ltd. ("RMB") pursuant to which RMB has agreed to increase the existing secured, short term debt facility of US$12 million (the "Original Facility") by an additional US$8 million (the "Extended Facility", together with the Original Facility, the "Facility") (see press release dated October 18, 2012). The Extended Facility will be used for the completion of the construction of the Lincoln Mine Project (the "Project") near Sutter Creek, California, and for agreed general corporate purposes. With this Extended Facility, RMB has now made an aggregate of US$20 million available to the Company, of which US$12 million has been drawn by the Company. In addition, the Facility's due date has been extended from June 30, 2013 to June 30, 2014 and now bears interest at the rate of LIBOR plus 15% per annum.
The Extended Facility is subject to an arrangement fee of 5% of the Extended Facility, which will be paid to RMB Resources Inc. or to RMB on the first draw down on the Extended Facility. The security granted by the Company is consistent with that under the existing prepaid gold facility with RMB and includes a first ranking charge over the Project.
A Special Committee of the Board of Directors of the Company, comprised solely of independent directors of the Company, was established to review, consider and make recommendations to the Board of Directors of the Company with respect to the Extended Facility. The Special Committee determined that the terms of the Extended Facility are reasonable in the circumstances of the Company and recommended that the Board of Directors of the Company approve the Extended Facility.
The Extended Facility is a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and the policies of the Exchange as a result of the fact that RMB is an affiliate of an entity that owns approximately 48.1% of the issued and outstanding shares of the Company. The Company has relied on the exemptions from the formal valuation and minority shareholder requirements of MI 61-101 contained in sections 5.5(b) and 5.7(e) of MI 61-101 in connection with the Extended Facility. The Company did not file a material change report more than 21 days before the expected closing of the Extended Facility as details of the Extended Facility were not settled until shortly before the closing of the Extended Facility.
Sutter is a growth-oriented exploration and development company preparing to become a North American gold producer. The Company has two projects: the Lincoln Project located in Amador County, California and the Santa Theresa Project located in the Northern Baja region of Mexico. Currently, the Company's primary focus is the evaluation and development of the Lincoln Project, beginning with the shallow portion of the Lincoln-Comet ore zone of the Lincoln Project, located on the California Mother Lode Gold Belt. The Lincoln-Comet and Keystone zones have a NI 43-101 compliant Indicated Resource estimate (completed in February 2008) of 612,400 tonnes (673,600 tons) grading 11.3 g/t Au (0.33 oz/ton) containing 223,000 ounces of gold and Inferred Resources of 2,161,700 tonnes (2,377,900 tons) grading 6.6 g/t Au (0.19 oz/ton) containing 458,900 ounces of gold.
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