CPPIB Provides Financing for Emerging Gold Producer
Posted on 05/16/2015
Globally, the mining sector in general is suffering a crisis of confidence as commodity investment inflows shrink below a 2012 peak. Many mining companies are in dire need of capital. Rubicon Minerals Corporation, an emerging gold producer, entered into a financing agreement with CPPIB Credit Investments Inc., a unit of Canada Pension Plan Investment Board (CPPIB), for a US$ 50 million secured loan facility that bears an annual cash interest rate of 7.5%, compounded quarterly. The facility has a five-year term that will mature on May 12, 2020. In addition, CPPIB will get 10 million in warrants, with each warrant entitling CPPIB to acquire one common share of Rubicon Minerals for a period of five years from the date of closing at an exercise price of C$ 1.715, which represents a 30% premium to the five-day volume weighted average price of Rubicon shares on the Toronto Stock Exchange on closing.
This facility will be used for the development of the Phoenix Gold Project located in Red Lake, Ontario. Rubicon Minerals has started processing low-grade mineralized material. The deposit in Red Lake is High-grade Archean lode gold (underground). The company is believes that will start initial gold production in the middle of 2015. The Phoenix Gold Project is fully permitted for projected initial production to 1,250 tonnes per day.
