Arianne Closes a $10 Million Credit Facility and a $1 Million Non-Brokered Private Placement

 

Under the terms of the credit facility, Arianne can draw up to Cdn$10 million and all amounts drawn will bear interest at a variable rate equal to 500 basis points over 3 month Canadian LIBOR. Additionally, the Company issued the lender 4 million non-transferable warrants which are subject to vesting periods imposed by the TSX Venture Exchange (the "Exchange") (please refer to the July 26, 2012 press release for details on terms and conditions of the warrants). As at the date hereof, 2 million warrants have vested and the remaining 2 million warrants shall vest as additional amounts are drawn by the Company. The warrants are also subject to a mandatory hold period of four (4) months ending January 11, 2013. Lastly, Arianne has also provided the lender with a Cdn$1/tonne production fee on all phosphate concentrate sales from the Project. The production fee can be repurchased at anytime for a lump sum payment of Cdn$6 million. The production fee must also be repurchased by the Company for the same amount in the event of a change of control where at least 90% of Arianne's issued and outstanding shares are acquired, purchased or otherwise owned by a third party, either by way of takeover bid or any other type of transaction having the same result. In connection with this transaction, Arianne paid on closing an arrangement fee of Cdn$100,000 to the agent and a commitment fee of Cdn$200,000 to the lender.

 

"This financing is a significant step forward for Arianne," said Bernard Lapointe Chairman & CEO of the Company. "With this funding closed, we can now focus on completion of our bankable feasibility study with Cegertec WorleyParsons and securing the permits to develop our world-class Lac a Paul phosphate mining project."

 

"The structure of this innovative deal is very beneficial to our shareholders," added Jim Cowley, President of Arianne. "There is minimal dilution to Arianne's shareholders, a low interest rate, and deferral of actual cash payments until the time when Arianne's project development is more advanced and we are in a better position to repay them."

 

Arianne is also pleased to announce the completion of its previously announced private placement for aggregate proceeds of $1,012,000. In total, Arianne issued 1,100,000 flow-through shares at a price of $0.92 per share. In this private placement, insiders of the Company have subscribed for aggregate proceeds of $95,680. The Company paid a cash commission of $80,960 in relation to the private placement and issued 88,000 non-transferable share purchase warrants exercisable at a price $0.92 per share until September 10, 2014. All securities issued pursuant to the private placements are subject to a mandatory hold period of four (4) months ending January 11, 2013. The proceeds of the private placement will be used by the Company for the exploration program on the Project.

 

The line of credit and the private placement are subject to final approval from the Exchange.