Aug 27, 2010
Vancouver, BC -- Barkerville Gold Mines Ltd. (TSXV: BGM) (the "Company") announces that it has closed its private placement secured debt financing (the "Offering") which was previously announced on July 23, 2010, July 26, 2010 and August 9, 2010, and for which D&D Securities Company acted as lead agent together with MGI Securities Inc. as co-agent and other agents as part of the selling group (collectively, the "Agents").
The Company raised a total of Cdn$5,535,000 from the issuance of $5,535,000 of senior secured convertible notes (the "Notes") and 6,509,160 common share purchase warrants (the "Warrants") of which $4,500,000 was issued on a brokered basis and the balance was raised directly by the Company. Management was of the opinion that it was unnecessary to incur any further debt than necessary.
The Notes are for a two year term and bear interest at an annual rate of 10% per year, payable quarterly. The Notes are convertible at the option of the holder (the "Noteholder") into common shares of the Company (the "Shares"), at any time after 18 months from the date of issuance for a conversion price of $0.85 per Share. In the event of a change of control of the Company, the Noteholders will have the option to have their Notes redeemed by the Company. The Notes may be redeemed for cash at the option of the Company at any time after 6 months from the date of issuance, without penalty or premium. So longas any Notes remain outstanding, the Company may not undertake any further debt financings without prior approval of 66 2/3% of the Noteholders outstanding at that time.
The Notes were issued pursuant to a trust indenture among the Company, its wholly-owned subsidiary, 0847423 B.C. Ltd, and Computershare Trust Company of Canada. The Company has granted a charge against the QR Mining Lease, subject to permitted obligations and liabilities, to secure its obligations under the Notes. Commencing February 2011, the Company will use 25% of its Free Cash Flow on a monthly basis to redeem the Notes on a pro rata basis, thereby reducing the outstanding obligations of the Company to the Noteholders.