Daily News: March 25, 2015

Orion Mine Funds Red Eagle Construction Financing

Red Eagle Mining announced a $65 million construction financing with Orion Mine Finance. The financing includes a private placement of common shares and a secured $60 million facility.

Pursuant to the Private Placement, Red Eagle Mining will issue Shares in an amount equal to the lesser of $4 million divided by the dollar equivalent of CAD $0.33 on the closing date and such number of Shares as would result in Orion owning 19.9% of the issued and outstanding shares. Orion also subscribed for a first tranche of $1 million which closed on February 3, 2015, as previously news released. Under the terms of the subscription agreement, so long as Orion owns at least 15% of the issued and outstanding shares, Orion shall have the right to appoint a director to the board of Red Eagle Mining and so long as Orion owns at least 5% of the issued and outstanding shares, Orion shall have the right to participate in any future equity financings in order to maintain Orion’s then current equity ownership in Red Eagle Mining.

The facility includes the following key terms:

Draw down of the credit facility is subject to Red Eagle Mining completing an additional equity financing of at least $15 million (equity financing)

The facility will have a five year term with a principal holiday and capitalized interest for up to 18 months from the first advance

Advances under the facility will bear interest at LIBOR +7.5%

A production payment of U.S. $30 per ounce produced is payable on the first 405,000 ounces of gold produced

Granting of 5,000,000 warrants to purchase Shares to Orion exercisable for a five year term at a strike price determined in the context of the Equity Financing

Amounts outstanding under the facility will be secured against all of Red Eagle Mining’s property and assets.

San Ramon is now fully permitted and close to being fully financed to meet the planned capital expenditure of $74 million including contingencies, comments Ian Slater, CEO. Red Eagle is on track to commence construction by mid-2015 with production in 2016.

Substantially all of the proceeds will be used for development and construction of the San Ramon Gold Mine. The shares will be subject to a four month hold period from the date of issuance. The closing of the transactions are subject to the prior approval of the TSX Venture Exchange.

The Orion Mine Finance Group is a mining focused business with approximately $1.8 billion under management specializing in providing flexible capital investment solutions to junior mining companies in the base and precious metals sector.

Red Eagle Mining is a well-financed gold exploration and development company with an experienced mine-development team.