Shares of Barkerville Gold Mines Ltd.
, Stock Forum
) plunged 52.5% Wednesday as the stock resumed trading on the TSX Venture Exchange following a lengthy absence, lasting over a year.
Prior to this morning, Barkerville shares hadn't traded since mid-August, 2012, when the British Columbia Securities Commission and the TSX Venture Exchange stepped in amid concerns about the junior's resource estimates for its Cariboo gold property in central B.C.
In early trading Wednesday, the stock fell 52.5% to 58 cents, leaving the company with a market cap of $63.6 million, based on 109.7 million shares outstanding. That's down from the previous close of $1.22.
Meanwhile, Barkerville said it and its subsidiaries have entered into a $15 million gold loan facility with 2176423 Ontario Limited, a company owned by asset manager Eric Sprott, pursuant to the terms and conditions of a credit agreement dated Oct. 8, 2013.
The facility was advanced by the lender on Oct. 8, 2013 in a single advance of $15 million in accordance with the terms of the credit agreement, which funds are held in escrow until the company's common shares are reinstated for trading on the TSX Venture Exchange, which is expected to occur on Oct. 9, 2013.
According to the Barkerville Gold Mines press release
, the company will use the proceeds of the facility to pay existing trade payables, to repay its recent bridge loan of $1.5 million and for the payment of operating expenses on a going forward basis.
The facility is guaranteed by the company's subsidiaries and secured by first ranking security over all of the credit parties' present and future assets and a pledge of the shares of the company's subsidiaries.
The facility is due and payable by way of three cash payments on each of July 31, 2014, May 31, 2015 and March 31, 2016 and the company may not voluntarily prepay the facility at any time prior to maturity without the lender's prior written consent. However, the company may at any time prepay all or any part of the facility using a reference price of US$1,600 per ounce of gold. The facility does not bear interest.
The cash payments to be made on each repayment date are based each time on what would be the notional value of 4,166.67 ounces of gold to be deliverable on each such repayment date and priced at the then Bloomberg composite closing value of gold at 4 p.m. on the day prior to each particular repayment date over the term of the facility.
If the then current gold price is less than US$1,200 per ounce on a particular repayment date, then the company's corresponding repayment amount shall be determined using a reference price of US$1,200 per ounce.
If the then current gold price is above US$1,600 per ounce on a particular repayment date, then the company's corresponding repayment amount shall be determined using a reference price of US$1,600 per ounce.
Notwithstanding the foregoing, the company will guarantee a minimum rate of return to the lender of 10% per annum on the aggregate principal amount of the facility over the life of the facility. The minimum rate of return shall be calculated on the date on which the facility is repaid in full and shall exclude the structuring fee of $150,000 payable to the lender.
In the event that any repayment amount payment above is delayed, an additional cash payment of 2.5% per month will be due on the first business day of each month thereafter for each missed payment until the repayment amount has been made. The additional cash payment will be calculated by multiplying the dollar amount of the gold equivalent deliverable at that time by 2.5%.
Barkerville is focused on exploration and development of gold projects in the Cariboo Mining District in central B.C.