Yukon-Nevada Gold Corp. Raises $59,328,000 by Exercise of Warrants and Private Placement
VANCOUVER, May 24, 2011 /CNW/ --
VANCOUVER, May 24, 2011 /CNW/ - Yukon-Nevada Gold Corp. (TSX: YNG; Frankfurt Xetra Exchange: NG6) (the 'Company') is pleased to announce an update on its financing
activities. All amounts are in Canadian funds except where noted.
Exercise of Share Purchase Warrants
Further to the Company's news release of March 10, 2011 wherein the
Company advised that shareholders approved a resolution to reduce, for
a limited time, the exercise prices of the Company's unlisted share
purchase warrants, the 30 day period for the reduction concluded on
April 13, 2011 with 59,054,083 warrants exercised during the said 30
day period, for gross proceeds $12,490,381.
Subsequent to the expiry of the deadline for the discounted exercise
price, Orifer S.A., a major shareholder, assisted the Company by
agreeing to transfer its current warrant holdings for nominal
consideration to a number of institutional investors including Deutsche
Bank AG, London Branch, ('Deutsche Bank'). The Orifer warrants entitle
the holders to purchase up to 140,400,000 shares of the Company at the
price of $0.32 per share at any time up to January 12, 2012. Orifer
agreed to transfer the warrants to Deutsche Bank and the other
institutions, subject to documentation and final agreement and any
other regulatory approvals required by applicable securities laws, on
the condition that the warrants are exercised immediately. Deutsche
Bank has agreed to exercise 80,000,000 warrants for gross proceeds of
$25,600,000. Other institutional investors have agreed to exercise an
additional 60,400,000 warrants for gross proceeds of $19,328,000.
Private Placement
The Company is also pleased to announce that the Company has negotiated
a $14,400,000 private placement to sell to Deutsche Bank 33,488,372
units at a price of $0.43 per unit. Each unit consists of one common
share in the capital stock of the Company (the 'Shares') and one
warrant (the 'Warrants'). Each Warrant will have a 24 month term and
is exercisable for one Share at an exercise price of $0.55. The
Warrants are subject to accelerated expiry, at the option of the
Company, in the event that the ten-day volume weighted average trading
price of the Company's shares equals or exceeds $0.90 per share for ten
consecutive trading days. There is no finder's fee or commission
payable on the private placement. In accordance with securities
legislation currently in effect, the Shares, the Warrants and the
Shares underlying the Warrants, will be subject to a 'hold period' of
four months plus one day from the date of closing of the private
placement. The completion of the private placement remains subject to
documentation and final agreement, TSX approval and any other
regulatory approvals required by applicable securities laws.
Use of Proceeds
The exercise of share purchase warrants and the closing of the private
placement will provide the Company with gross proceeds of $59,328,000,
which will be spent on capital expenditures to up-grade the Jerritt
Canyon Gold Project in Nevada.
Additional Finance Facilities
In addition to the above investment by Deutsche Bank, the Company has
received an indicative non-binding term sheet from Deutsche Bank for a
Gold Forward sale under which the Company would sell forward a portion
of its production to raise up to an additional USD120,000,000. The
terms of this facility are presently being discussed and the Company
will advise the market further if this transaction is concluded.
Primary use of these proceeds should the proposed transaction close will
be towards (but not limited to):
-- Construction of new lined tailings storage facility as well as
a secondary water storage facility to be completed before
winter 2011/12;
-- Upgrade to Digital Control Facility Monitoring System to
improve plant operating efficiencies by replacing the current
pneumatic system;
-- Installation of additional quench tank and related items during
the 2-week scheduled annual maintenance shutdown periods in
June and September 2011;
-- Complete winterization of the plant including construction and
installation of new ore drying equipment that would be
protected from climatic extremes;
-- Completion of remaining environmental obligations as outlined
in the Consent Decree with the Nevada Division of Environmental
Protection to keep our current compliance in good standing;
-- Complete the purchase of underground equipment necessary to
commence operations at the SSX/Steer underground gold mine and
continue development of the Starvation Canyon mine;
-- Investing $12M in further exploration; and
-- To fully stock and equip the Jerritt Canyon Warehouse with
spare parts for mill maintenance and repairs to minimize future
down time.
The above new capital will allow the Company to complete its 2011/12
capital expenditure and upgrade program which will facilitate increased
mill availability and achievement of its production milestones, the
first of which will be gold production at the annual rate of 150,000
ounces of gold per annum by end of calendar 2011.
In addition to the mill upgrade program, the capital works program
provides for new underground equipment to allow the re-opening and
operation of the SSX-Steer underground gold mine. This will ramp up to
produce an initial 1,200 tons of ore to the mill per day, in addition
to the existing Smith Mine which has met its budgeted 1,000 tons per
day since re-opening. The Company's own mines will then deliver
approximately 2,200 tons of ore a day at an average grade of 0.22
ounces per ton. Ore from Company owned stock piles and ore purchased
from Newmont will more than supplement the required feed to the
upgraded facility to run at 4,000 tons per day.
Yukon-Nevada Gold Corp. is a North American gold producer in the
business of discovering, developing and operating gold deposits. The
Company holds a diverse portfolio of gold, silver, zinc and copper
properties in the Yukon Territory and British Columbia in Canada and in
Nevada in the United States. The Company's focus has been on the
acquisition and development of late stage development and operating
properties with gold as the primary target. Continued growth will occur
by increasing or initiating production from the Company's existing
properties.
If you would like to receive press releases via email please contact nicole@yngc.ca and specify 'Yukon-Nevada Gold Corp. releases' in the subject line.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
WARNING: The Company relies upon litigation protection for
'forward-looking' statements.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The
securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the 'U.S. Securities Act')
or any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/May2011/24/c6962.html
Yukon-Nevada Gold Corp.
Richard Moritz
Senior Director, Institutional Investor Relations
Tel: (604) 688-9427
Email: rmoritz@yngc.ca
Nicole Sanches
Investor Relations Manager
Tel: (604) 688-9427 ext 224
Email: nicole@yngc.ca
www.yukon-nevadagold.com
CHF Investor Relations
Jeanny So
Director of Operations
Tel: (416) 868-1079 ext. 225
Email: jeanny@chfir.com
www.chfir.com
Axino AG
Wolfgang Seybold
President and CEO Tel: 49 711 25 35 92 40
Email: wolfgang.seybold@axino.de
www.axino.de/