Orion, Osisko, Others Provide $394MM Financing for Victoria Gold

Victoria Gold closed a construction financing package totaling approximately C$505 million ($394 million) with Orion Mine Finance, Osisko Gold Royalties and Caterpillar Financial Services.  The financing will fully fund the development of the Eagle Gold project through to commercial production.

The financing is comprised of:

• Two credit facilities totaling $175 million

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• An equipment financing facility for up to $50 million

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• A C$98 million ($76 million) royalty financing

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• A private placement of Victoria common shares to two separate subscribers for a total of C$125 million ($97 million)

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“With this project financing package, Victoria is in a position to continue construction activities and advance the Eagle project to first gold pour, which we expect in the second half of 2019,” commented John McConnell, president and CEO. “With this significant milestone behind us, we look forward to building a high-quality, profitable, and environmentally safe project that will deliver significant economic benefit to all of our stakeholders.”

In connection with the financing, Victoria has executed a term sheet with respect to the sale to Osisko of a 5% NSR royalty for proceeds of C$98 million ($76 million) and the purchase by Osisko, on a private placement basis, of 100,000,000 common shares of Victoria at a price of C$0.50 (39 cents) per common share for proceeds of C$50 million ($39 million).

Victoria has also executed a term sheet with Orion with respect to Orion’s provision of a senior secured project finance debt facility in the principal amount of $75 million and the purchase by Orion, on a private placement basis, of 150,000,000 common shares of Victoria at a price of C$0.50 ( 39 cents) per common share for proceeds of C$75 million ($58 million).

Separately, Victoria has executed a term sheet with Caterpillar Financial with respect to a proposed equipment financing for up to $50 million.

Details of the senior secured debt facility are:

• $75 million to be available from the date the secured subordinated loan facility is fully drawn until two years post-closing

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• Interest rate of three-month LIBOR plus 5.00%

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• Two-year interest holiday during which interest will accrue and be capitalized reducing cash payments for Victoria during the construction period

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• Principal and accrued interest is repayable in 15 quarterly installments beginning 24 months after the closing of the facility

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Details of the secured subordinated loan facility are:

• $100 million loan facility to be available from closing for a period of two years

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• Interest rate of three-month LIBOR + 6.70%

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• Two-year interest holiday during which interest will accrue and be capitalized reducing cash payments for Victoria during the construction period

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• Principal is due at maturity on March 31, 2024

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Details of the equipment finance facility are:

• Up to $50 million of equipment leases

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• Facility will be used to support the acquisition of primarily new Cat equipment

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• Six-year, amortizing facility

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Closing of the financing is conditional on the satisfaction of certain conditions precedent, including finalization of remaining documentation, including appropriate intercreditor arrangements between and among Victoria, Osisko, Orion and Caterpillar Financial (as applicable) and completion of necessary steps to perfect the security interests in respect of the Orion debt facilities, Osisko Royalty and Cat equipment financing.

The company has also concluded a term sheet for a C$20 million ($14 million) bridge loan with Auramet International. The Auramet bridge facility provides Victoria Gold flexibility to ramp up site activities while the company closes the financing outlined herein. The company may choose whether or not to draw on the bridge facility dependent upon timing of closing and funding under the financing.

Auramet International and BMO Capital Markets are acting as financial advisors to Victoria in connection with the financing, while Bennett Jones and Cassels Brock act as their legal counsel.

Victoria Gold’s 100%-owned Dublin Gulch gold property is situated in the central Yukon Territory.