ENP Newswire -
Release date- 04072014 -
Upon completion of the Transaction, Tyhee will hold approximately 73% of Sutter's issued and outstanding shares (on a non-fully diluted basis).
Sutter currently holds a number of precious metals properties in
Sutter's assets cover 3.2 miles of what has been described as 'the most productive portion' of
The Implementation Agreement, which will be filed under Sutter's profile on SEDAR, follows one year of extensive due diligence by Tyhee's management and technical team, including comprehensive discussions, site inspections and a review of Sutter's financial situation.
Upon consideration of Sutter's current financial difficulty and the determination that the Transaction will be financially beneficial to Sutter's operations, the board of directors of Sutter, upon recommendation of a special committee of independent directors, has approved the Transaction.
The Transaction would benefit both Tyhee and Sutter shareholders. In particular, benefits include:
For Sutter, improved financial standing, with significantly improved liquidity and access to capital to properly capitalize completion of development of the
For Tyhee and Sutter, being transformed into a developing precious metals production company with gold production planned from
or Tyhee and Sutter, significantly enhanced development and exploration upside across a diverse portfolio of precious metals properties, including the Keystone deposit in
For Tyhee and Sutter, utilizing Tyhee's highly experienced underground mining team that will be key to successful operations at
For Sutter, access to an expanded management team that includes complementary experience in exploration, development, operations, and financing.
Tyhee proposes to acquire certain of RMB's current interests in Sutter pursuant to the Implementation Agreement as follows:
1. Tyhee will acquire the current stock position of RMB and/or its affiliates in Sutter (58,216,820 common shares) at
2. RMB will reduce its debt exposure to Sutter by
3. RMB will assign to Tyhee up to
90 million Tyhee common shares issued from treasury;
a covenant by Tyhee to consummate an additional financing to raise the remaining balance necessary to achieve commercial production of Sutter' s Lincoln-Comet mine, to a maximum of
a covenant by Tyhee to cause Sutter to make interest payments, principal repayments, and mandatory prepayments on the retained
The Transaction does not require a shareholder approval of either Tyhee or Sutter.
Closing of the Transaction is subject to customary closing conditions, including receipt of the approval of the
The Implementation Agreement contains a non-solicitation covenant on the part of RMB and Sutter, subject to customary fiduciary out provisions. The Implementation Agreement also provides Tyhee with the right to match any potential third party proposal. Sutter is permitted to terminate the Implementation Agreement under certain conditions, including the payment of a
In connection with the Transaction, Tyhee intends to complete, through a previously announced special purpose vehicle (the 'SPV'), a concurrent financing of a minimum of
1. Face value:
2. Term: Five (5) years.
3. Interest Rate: Eight (8) percent per annum, payable annually in cash or in ounces of gold, at the election of the holder of the convertible debenture.
4. Security: Secured against the assets of
5. Conversion: Principal to be convertible to Tyhee common shares at
6. Redemption: Principal amount to be redeemable by Tyhee after 24 months, subject to payment of premium.
7. In addition, if at any time after 24 months from the issuance of the convertible debentures gold trades at greater than
Terms of Loans to Sutter
interest at 12% per annum, capitalising until
repayment in up to 48 consecutive monthly installments of equal amounts, subject to certain conditions and adjustments, commencing on
such loan would be senior secured debt to Sutter and any other Sutter debt would be fully subordinated on terms satisfactory to RMB.
3. Funds to Restart Production - Further advances ('Tyhee Advances') to Sutter by Tyhee or its related entities would be made up to
Our number one priority over the last many months has been to secure the additional investment needed to achieve commercial production. We are supportive of RMB and Tyhee's transaction, which will provide both the funding and technical/operational expertise to make
Sutter has two projects: the
The Lincoln-Comet and Keystone zones have a NI 43-101 compliant Indicated Resource estimate (completed in
Chief Financial Officer
Tel: 303 238 1438
This news release contains 'forward-looking information' under Canadian securities law.
Any information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words such as 'expect', 'anticipate', 'believe', 'plans', 'estimate', 'scheduling', 'projected' or variations thereof or stating that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.
Forward-looking information relates to, among other things: the price of silver and gold; the accuracy of mineral resource and mineral reserve estimates; the ability of the Company to finance its operations and capital expenditures; future financial and operating performance including estimates of the Company's revenues and capital expenditures and estimated production.
Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licenses; title to properties; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; operations and political conditions; environmental risks and risks and hazards of mining operations.
This list is not exhaustive of the factors that may affect any of the Company's forward-looking information. Forward-looking information about the future is inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors.
Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.
The Company's forward-looking information is based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking information.
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