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Gran Colombia outlines terms for US$152M units offer


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Gran Colombia outlines terms for US$152M units offer

Gran Colombia Gold Corp. on Feb. 15 announced terms for a best efforts private placement of up to 152,000 units to raise aggregate gross proceeds of up to US$152.0 million.

Each unit will consist of US$1,000 of senior secured gold-linked notes and 124 common share purchase warrants.

Each warrant will be exercisable at C$2.20 for 1 common share of the company at any time before the maturity of the notes.

The notes will have an eight-year term, bearing an annual 8% interest rate.

Meanwhile, the company will set aside an amount of physical gold each month in a trust account.

On a quarterly basis, the physical gold in the trust account will be sold and the sale proceeds will be used to amortize the principal amount of the notes based on a guaranteed floor price of US$1,250/oz.

The scheduled annual number of physical gold ounces to be deposited into the trust account will vary by year, ranging from 23,000 ounces in the first year down to 4,000 ounces in the seventh year and a balance of 23,600 ounces in the final year of the term of the notes.

The net proceeds from the offering are earmarked to redeem the company's senior unsecured convertible notes due 2018, senior secured convertible notes due 2020 and 2024.