Inca One closes $600,000 (U.S.) first tranche of loan
2015-04-27 17:30 ET - News Release
Mr. Edward Kelly reports
INCA ONE CLOSES FIRST TRANCHE OF USD$1,500,000 CONVERTIBLE LOAN
Inca One Gold Corp., further to its press release of March 20, 2015, has closed the first tranche of the previously announced convertible loan for gross proceeds of $600,000 (U.S.).
The first tranche of the convertible loan bears interest at a rate of 15 per cent per annum, has a 12-month term and is subject to a 12-month renewal option, subject to certain conditions. Each tranche of the convertible loan is secured by a priority pledge of the inventory and related assets of the company's subsidiary, Chala One SAC.
The remaining two tranches of $500,000 (U.S.) and $400,000 (U.S.), respectively, are expected to be drawn down over the next two months, subject to closing conditions. These tranches have the same terms as the first tranche.
In certain circumstances, up to 40 per cent of the outstanding indebtedness under the convertible loan will be convertible into common shares of Inca One at the option of the lenders at a conversion price of 25 cents. The conversion amount is based on a fixed foreign exchange rate, which will result in a maximum of 2,987,800 common shares issuable upon conversion.
The convertible loan is with a syndicate of lenders led by Promerita Financial Corp. The company will pay an arrangement fee of 5 per cent of the gross proceeds of the convertible loan to Promerita for its role in arranging the convertible loan.
Concurrent with signing the convertible loan, the company amended the security terms of its $5.5-million bond financing announced May 20, 2014, whereby the bond financing lenders released their priority security over the Chala One inventory assets for a temporary 1-per-cent increase in the annual interest rate from 10 per cent to 11 per cent. The 1-per-cent interest rate increase will be in effect until the convertible loan has been repaid in full.
The proceeds of the convertible loan will be used to finance gold-bearing mineral inventory purchases at the company's Chala One plant in Peru and for general working capital purposes.
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