Golden Band Resources finalizes terms on $20 million term debt facility

SASKATOON, Aug. 2, 2012 /CNW/ - Golden Band Resources Inc. (Golden Band or the Company) (TSXV: GBN); (OTCQX: GBRIF) is pleased to announce final terms on a $20 million term debt facility (Term Debt Facility) with Waterton Global Value, L.P. (Waterton).

Proceeds from the Term Debt Facility, previously announced on May 10, 2012, will be used to repay the $5.5 million bridge loan, as well as fund the development of the Komis deposit, pay down the accumulated working capital deficit and construction of the permanent tailings management facility.

The Term Debt Facility will have a 24 month term, with principal repayable in twelve equal instalments commencing in September, 2013.  It will be secured by a first ranking charge over all assets of the Company.  Principal repayments can be made in cash or gold bullion, at the discretion of Waterton, and are subject to a discount fixed at 10%.  With the discount fixed at 10%, the cash equivalent remains constant at approximately $1.8 million regardless of movement in the price of gold.  The following table provides examples of the calculation for three different prices per ounce of gold: $1,600, $1,800 and $2,000.

Interest is payable monthly, in cash, at a rate of 9%.

The $20 million principal is to be advanced in three tranches, with the first tranche of $12.5 million to be advanced on closing.  The second and third tranches of $3.5 million and $4.0 million are to be advanced conditional on the attainment of certain operational milestones, covering three month periods, at the Roy Lloyd and Komis mines, including tonnes produced, mill recovery rates and gold ounces poured.  It is anticipated the second tranche would be received late in the 2012 calendar year and the third tranche early in the 2013 calendar year.

As a condition of entering into the Term Debt Facility, the Company will pay to Waterton a $400,000 structuring fee and will reaffirm the existing gold and silver supply agreement with Waterton whereby the Company will sell its gold production to Waterton until the later of May 9, 2015 and the date on which the Company has sold at least one hundred thousand ounces of gold to Waterton at market rates in effect on the date of sale.

The two million common share purchase warrants issued to Waterton concurrently with the bridge loan will be cancelled in accordance with their terms concurrent with the initial advance under the Term Debt Facility.

Robson Garden, President and CEO of Golden Band commented, "Negotiating this Term Debt Facility provides us with the financial resources to bring the Komis deposit into production as an open pit operation.  It is an exciting time for Golden Band as we move into the next phase of our development as a gold producer bringing another one of our outstanding deposits into commercial production. We will now be focused on bringing the Golden Heart deposit into production in 2013, and furthering the development of the Corner Lake and Greywacke deposits.

We are also excited by the commitment made by Waterton to our Company and look forward to a long relationship that is mutually rewarding as we work to grow our production and resources."

About Golden Band

Golden Band Resources is a gold producer operating in the La Ronge gold belt in northern Saskatchewan and publicly listed on the TSX Venture exchange in Canada under the symbol GBN and is traded in the United States on the OTCQX under the symbol GBRIF. Commercial production was declared on April 1, 2011 and the Company has production from two mines, the Roy Lloyd and EP gold mines. A third mine, Komis, is to be brought into production later in the summer of 2012. Processing is at the centrally located Jolu mill, with a nominal capacity of 700 tonnes per day. The Company has been actively exploring for gold since 1994 and has assembled a land package of 870 km², including 13 known gold deposits and four former producing mines. The Company plans to undertake aggressive drill programs throughout the La Ronge Gold projects with the goal of significantly expanding the existing NI 43-101 gold resources that have been identified to date.

On behalf of the Board of Directors of Golden Band Resources Inc.,

"Robson Garden"
A. Robson Garden, President and CEO

Caution Regarding Forward-Looking Information and Statements
This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the mine properties, estimates of production, costs of production, the sufficiency and availability of capital and financing and other future plans, objectives or expectations of Golden Band Resources Inc. (Company) are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators available on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Accordingly, readers should not place undue reliance on forward-looking information. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.

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. 

SOURCE Golden Band Resources Inc.