Aureus Mining Inc. - Proposed US$11 millon investment by international finance corporation and underwritten Offering to raise approximately US$15.0 million

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TSX : AUE
AIM : AUE

TORONRO, April 15, 2014 /CNW/ - Aureus Mining Inc. (TSX: AUE / AIM: AUE) ("Aureus" or the "Company") is pleased to announce that it has entered into an underwriting agreement (the "Underwriting Agreement") with GMP Securities L.P., Clarus Securities Inc. and Numis Securities Limited (the "Underwriters") to sell 33,375,000 Units (as defined below) at a price of £0.27 per Unit (the "Issue Price") to raise gross proceeds of approximately £9.0 million (approximately US$15.0 million) (the "Offering").

Each Unit is comprised of one common share of the Company, or where applicable, a depository interest representing the same (each, a "Share") and one half of one common share purchase warrant of the Company (each whole common share purchase warrant, a "Warrant").  Each Warrant will entitle the holder thereof to purchase one Share at a price of £0.378 (or the prevailing C$ equivalent thereof) (which is at a 40% premium to the Issue Price) for a period of 42 months from the date on which the Offering closes (the "Closing Date").

In addition to the Offering, Aureus is pleased to announce that it has reached an agreement in principle with International Finance Corporation ("IFC"), the private sector arm of the World Bank Group, for a proposed subscription of 24,520,000 Units at the Issue Price to raise gross proceeds of approximately £6.6 million (approximately US$ 11.1 million) (the "Subscription").

The closing of the Subscription is subject to the completion of due diligence by IFC and certain conditions, including approval by IFC's Board of Directors following completion of a required 60 day public disclosure period and the finalisation and execution of definitive agreements.  Subject to these conditions precedent being satisfied, the Subscription is expected to close by the end of June 2014.

Upon closing of the Subscription, Aureus will be required to meet IFC's environmental, social and safety standards on an ongoing basis. IFC will have the right, but not the obligation, to maintain its pro rata shareholding in any future equity financing and, subject to maintaining a minimum shareholding position, to nominate a director to the Company's board of directors.

As at 31 March 2014, the Company had cash resources of approximately US$18 million, of which US$11 million is ring fenced for the Company's equity contribution to the capital requirements of the New Liberty Gold Project ("New Liberty") in addition to approximately US$57 million of expenditure to date, which has all been funded from the Company's internal resources. The Company is required to maintain a minimum cash balance of US$5 million under the terms of its US$100 millon Project Debt Finance Facilities (the "Facilities") until full utilisation of the Senior Facility has occurred. The remainder of the capital requirement for New Liberty will be financed by the Facilities. The construction of New Liberty currently remains on time and on budget in line with the capital requirements set out in the Company's Definitive Feasibility Study as announced on 20 May 2013.

The net proceeds of the Offering will be applied as follows:

• US$8 million additional equity contribution to New Liberty as a condition to the draw down, if required, of the Company's US$8 million cost over-run facility;
• US$4 million for New Liberty including additional pre-production drilling and US$2 million additional contingency reserve required under the terms of the Facilities; and
• US$2 million corporate overheads and working capital. 

The proceeds of the Subscription will be used to allow the Company to continue its exploration activities, in particular continued drilling and the completion of a PEA at Ndablama, further drilling at Weaju and target generation work across the Company's wider licence portfolio in Liberia and Cameroon.

Application has been made for the admission to trading of the Shares on the AIM Market of the London Stock Exchange plc ("AIM") ("Admission"). It is expected that Admission will become effective at 2.30PM BST on or around 22 April 2014 and that dealings in the Shares will commence at that time.

The closing of the Offering remains subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including by the Toronto Stock Exchange ("TSX") and Admission becoming effective.  The closing of the Offering is expected to occur on or about 22 April 2014, or such other date as the Company and the Underwriters may agree.  The Offering is also conditional upon the Underwriting Agreement nothaving been terminated.

The closing of the Offering and the Subscription are not in any way conditional upon each other.

The Units have not been and will not be qualified for sale to the public under applicable securities laws in Canada and, accordingly, any offer and sale of the Units in Canada will be made on a basis which is exempt from the prospectus requirements of such securities laws. The Units issued to Canadian residents pursuant to the Offering will be subject to resale restrictions under Canadian securities laws for a period of four months plus one day from the Closing of the Offering.  Subject to applicable securities laws, the Units issued to residents of countries other than Canada pursuant to the Offering may not be sold, transferred or otherwise disposed on the TSX or, except pursuant to an exemption from the prospectus requirements under Canadian securities laws, to any person in Canada or otherwise into Canada for a period of four months plus one day from the date of the closing of the Offering.

Director Participation

Pursuant to the Offering, certain directors of the Company have committed to subscribe for Units in the Offering at the Issue Price as follows:

David Reading, President and Chief Executive Officer of Aureus Mining, said:

"The funds raised through the Offering give Aureus a robust balance sheet as we draw down on our project finance facilities for the completion of the construction of New Liberty as well as allowing us comfort in accessing the additional cost overrun facility should it be required. The construction of New Liberty remains on budget and on schedule to commence production in Q1 2015.

We very much look forward to welcoming IFC as a shareholder of the Company. Their proposed investment will allow us to continue our exciting exploration programmes and deliver shareholder value by building on the success we have had to date. We would like to thank both our existing and new shareholders for their support."

In this announcement, US$ amounts have been translated at a rate of £1:US$1.67.

About Aureus Mining Inc.

The Company's assets include the New Liberty gold deposit in Liberia (the "New Liberty Gold Project", "New Liberty" or the "Project"), which has an estimated proven and probable mineral reserve of 8.5 Mt with 924,000 ounces of gold grading 3.4 g/t and an estimated measured and indicated mineral resource of 9,796 Kt with 1,143,000 ounces of gold grading 3.63 g/t and an estimated inferred mineral resource of 5,730 Kt with 593,000 ounces of gold grading 3.2 g/t.  A Definitive Feasibility Study has been completed on the Project and construction has commenced with earthworks.  The Project is expected to have an 8 year mine life and annual production of 119,000 ounces for the first 6 years of production.  The Company has financed the Project's equity and debt funding requirement. The foregoing mineral reserve and mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated July 3, 2013 and entitled "New Liberty Gold Project, Liberia, West Africa, Updated Technical Report".

The New Liberty Gold Project is located within the Southern Block of the 100% owned Bea Mountain mining licence. This licence covers 457 km² and has a 25 year, renewable, mineral development agreement.  The Northern Block of the Bea Mountain mining license also hosts additional gold projects of Ndablama, Gondoja and Weaju, which are the focus of exploration programs during 2013.  Ndablama has an inferred mineral resource of 6,829 Kt with 451,000 ounces of gold grading 2.1 g/t and Weaju has an inferred mineral resource of 2,680 Kt with 178,000 ounces of gold grading 2.1 g/t.  The Archaen Gold exploration licence, which covers 89 km², is also a focus of exploration for 2013, with Leopard Rock being the main target.  The Yambesei (759 km²), Archaen West (112.6 km²), Mabong (36.6 km²) and Mafa West (15.6 km²) licences will also be subject to preliminary reconnaissance geological work. The foregoing mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated November 11, 2013 and entitled "Ndablama and Weaju Gold Projects, Bea Mountain Mining Licence, Northern Block, Technical Report on Mineral Resources".

The Company also has gold exploration permits in Cameroon.

Qualified Persons

The Company's Qualified Person is David Reading, who holds a MSc in Economic Geology from University of Waterloo, Canada and is a Fellow of the Institute of Materials, Minerals and Mining. David Reading is the President and CEO of Aureus Mining Inc. and approves this press release.

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector.  Working with private enterprises in more than 100 countries, IFC uses its capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity.  In FY 2013, IFC investments climbed to an all-time high of nearly US$ 25 billion, leveraging the power of the private sector to create jobs and tackle the world's most pressing development challenges.  For more information on IFC, please visit www.ifc.org.

Forward Looking Statements:

Certain information in this news release relating to Aureus Mining is forward-looking and related to anticipated events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks and uncertainties that may cause actual results or events to differ materially from current expectations, including: risks normally incidental to exploration and development of mineral properties; uncertainties in the interpretation of results from drilling and test work; the possibility that future exploration, development or mining results will not be consistent with expectations; regulatory and government decisions; the possibility that the Company will not complete the Offering within the time anticipated or at all; the possibility that the Subscription will not close within the time anticipated or at all; the possibility that future draw downs under the Facilities may not be available; construction of the New Liberty Gold Project being delayed and/ or over budget; economic conditions; availability and cost of financing; estimates of capital and operating costs and start-up costs; plans regarding construction activities; and future unforeseen liabilities and other factors including, but not limited to, those listed under "Risk Factors" in the Company's Annual Information Form, a copy of which is available on SEDAR at www.sedar.com, and in the Aureus Mining Admission Document, a copy of which is available at www.aureus–mining.com. Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, Aureus Mining disclaims any obligation to update or modify such forward-looking information, either as a result of new information, future events or for any other reason.

Any mineral resource and mineral reserve figures referred to in this press release are estimates and no assurances can be given that the indicated levels of minerals will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the mineral resource and mineral reserve estimates in respect of its properties are well established, by their nature mineral resource and mineral reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such mineral resource and mineral reserve estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Notes:

This Announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

GMP Securities Europe LLP ("GMP Europe"), which is a member company of GMP Securities L.P ("GMP"), is authorised and regulated in the United Kingdom by the Financial Conduct authority ("FCA") and acting as joint broker to Aureus Mining Inc. in respect of the Offering. 

Numis Securities Limited is authorised and regulated in the United Kingdom by the Financial Conduct Authority and acting as Nominated Adviser and joint broker to Aureus Mining Inc. in respect of the Offering.

Each of the Underwriters is acting for Aureus Mining Inc. and for no-one else in connection with the Offering, and will not be responsible to anyone other than Aureus Mining Inc. for providing the protections afforded to customers of the respective Underwriter nor for providing advice in connection with the Offering or any other matters referred to herein.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by any of the Underwriters or by any of their respective affiliates or agents or brokers as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

The distribution of this Announcement and the Offering in certain jurisdictions may be restricted by law.  No action has been taken by Aureus Mining Inc. or the Underwriters that would permit the Offering or possession or distribution of this Announcement or any other offering or publicity material relating to the Offering in any jurisdiction where action for that purpose is required.  Persons into whose possession this Announcement becomes available are required by Aureus Mining Inc. and the Underwriters to inform themselves about, and to observe, such restrictions.

The price of the Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Shares.

The Offering is only being made, and may only be, made to and is directed at (1) with respect to the United Kingdom, persons in the United Kingdom who are either (1) both (a) a "Qualified Investor" within the meaning of Section 86(7) of the Financial Services and Markets Act 2000 ("FSMA") and (b) within the categories of persons referred to in Article 19(5) (Investment professionals) or Article 49(2)(a) to (d) (High net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005, or persons in the United Kingdom to whom the Offering may otherwise be made or to whom the Offering may otherwise be directed in the United Kingdom without an approved prospectus having been made available to the public in the United Kingdom before the Offering is made, and without making an unlawful financial promotion; and (2) with respect to the United States, persons inside the United States who are "qualified institutional buyers" ("QIBs", as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act")), all such persons in (1) and (2) above together being referred to as "Relevant Persons". The securities being offered are only available to, and any invitation, offering or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, persons in the United Kingdom or the United States who are Relevant Persons.  Any person who is in the United Kingdom or the United States but who is not a Relevant Person should not act or rely on this Announcement or any of its contents. This Announcement does not contain an offer or constitute any part of an offer to the public within the meaning of Sections 85 and 102B of FSMA or otherwise. This Announcement is not an "approved prospectus" within the meaning of Section 85(7) of FSMA and a copy of it has not been, and will not be, delivered to the FCA in accordance with the Prospectus Rules or delivered to any other authority which could be a competent authority for the purpose of the Prospectus Directive. Its contents have not been examined or approved by the London Stock Exchange plc, nor has it been approved by an "authorised person" for the purposes of Section 21 of FSMA.

The Units and the securities underlying the Units have not been and will not be registered under the United States Securities Act, or any state securities laws, and may not be offered, sold or delivered within the United States except in transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. The Underwriters have agreed that, except as permitted by the Underwriting Agreement and as expressly permitted by applicable laws of the United States, they will not offer or sell the Units within the United States. The Underwriting Agreement permits the Underwriters, through certain of their U.S. broker-dealer affiliates, to (i) offer and sell the Units in the United States to QIBs pursuant to an exemption from registration under the U.S. Securities Act in a transaction not involving any public offering, and otherwise in accordance with any applicable state securities laws. This Announcement does not constitute an offering to sell, or a solicitation of an offering to buy, any Units in the United States and there will be no public offering of Units in the United States. Moreover, the Underwriting Agreement provides that the Underwriters will offer and sell the Units outside the United States only in accordance with Regulation S under the U.S. Securities Act. Until 40 days after the commencement of the Offering, an offer or sale of the Units within the United States by a dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act unless such offering or sale is made pursuant to an exemption from registration under the U.S. Securities Act.

SOURCE Aureus Mining Inc.