SAS Announces Us$25 Million Credit Facility and the Early Retirement of its Senior Secured Gold Notes
TORONTO, May 8, 2012 /CNW/ - St Andrew Goldfields Ltd. (TSX-SAS) (OTCQX-STADF),("SAS" or the "Company") advises that it has entered into a US$25 million credit facility with The Bank of Nova Scotia. The secured credit facility has an initial two year term and consists of US$10 million in revolving credit and US$15 million in non-revolving term credit.
SAS utilized US$8.8 million of the net proceeds of the term credit facility and US$2.3 million of its own cash to retire its obligations under the Company's Senior Secured Gold Notes by the purchase and payment of 6,696 ounces of gold to the gold note holders.
Funds available through the revolving credit facility may be used by SAS to finance working capital requirements, acquisitions, and for general corporate purposes as needed (and as permitted by the terms of the credit facility).
"The early retirement of the gold notes will enable us to generate stronger operational cash flow in the current year," said Jacques Perron, President and CEO of SAS. "As a junior producer, establishing this credit facility on favourable terms with a major Canadian bank that does not require hedging of our production, illustrates a high level of confidence in SAS' ability to meet its business objectives. The forecasted cash flow combined with the US$10 million revolving credit facility and our current cash position gives us the confidence and flexibility to advance our pipeline of gold development projects."
Under the terms of the facility, the Company was required to draw down the full amount (US$15 million) of the term credit on closing, and must make semi-annual payments of US$2 million to reduce the term credit commencing September 2012. There are no hedging requirements under the terms of the credit facility.
Interest rates on the credit facilities vary depending upon the Company's total debt ratio and range between 2.00% and 2.75% above prime on prime rate based advances or between 3.00% and 3.75% above LIBOR on any LIBOR advances.
About SAS
SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, north-eastern Ontario, which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada.
SAS owns and operate the Holt, Holloway and Hislop mines and is forecasting 2012 production of between 90,000 - 100,000 ounces of gold. The Company is also advancing the Taylor Project and is conducting an aggressive exploration program across 120km of land straddling the Porcupine-Destor Fault Zone.
FORWARD-LOOKING INFOMRATION
This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including in respect of the use of funds available under the credit facility.
This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, uncertainties relating to unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels; uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources; fluctuations in gold prices and exchange rates; changes in general economic conditions and changes in conditions in the financial markets. Such forward looking information is based on a number of assumptions, including but not limited to the level and volatility of the price of gold, the ability to achieve capital and operating cost estimates, the accuracy or reserve and resource estimates and the assumptions upon which such estimates are based, and the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forward‐looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. A description of these risks and uncertainties are can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.
SOURCE St Andrew Goldfields Ltd.
