Daily News: June 17, 2013

Macquarie to Provide $50MM Facility to Richmont Mines

Richmont Mines announced that it has secured a letter of offer for a senior secured credit facility up to US$50 million from Macquarie Bank to fund the long-term development of the Island Gold Deep project and for working capital commitments at the Island Gold Mine in Dubreuilville, Ontario.

At the option of Richmont, the facility may be provided in either US dollars or Canadian dollars, subject to an interest rate of USD LIBOR plus 700 basis points or CDOR plus 700 bps, respectively. In addition, the LIBOR rate may be fixed for the term of the facility at Richmont’s request, and the facility may be prepaid, in whole or in part, at any time without penalty, subject to standard break costs.

Paul Carmel, president and CEO of Richmont commented, “We are very pleased to have obtained this offer of financing in this difficult gold market. It is testimony to the quality of our Project, an asset with significant future potential for the Corporation and our shareholders. With minimal dilution for our shareholders, this offer provides Richmont with additional flexibility and financial confidence to effectively advance the Project which is at the core of Richmont’s long-term strategy. In the spirit of prudent balance sheet management, we will manage the drawdowns in a judicious manner and in concert with the prevailing gold price environment. The objective is to advance the Project in the most optimal manner possible, all the while maintaining a sound financial position.”

The US$50 million facility consists of three tranches, all of which are subject to certain conditions being met prior to drawdown.

According to the terms of the facility, Richmont will issue call warrants for the purchase of 1.25 million Richmont shares to MBL at closing of the facility agreement. The warrants have an exercise price of CAN$2.45 per share, and will expire three years from the original date of their issue to MBL. A total of 812,500 warrants will vest immediately upon closing of the facility agreement. The remaining 437,500 warrants will vest when the conditions to drawdown Tranche B are fully met by Richmont.