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Inca One announces US$10M debt restructuring, US$3M debt offering

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Inca One announces US$10M debt restructuring, US$3M debt offering

Vancouver, Canada-based Inca One Gold Corp. said April 19 that it signedcommitment letters to convert or restructure approximately US$10.0 million of itscurrent and long-term debts if it successfully raises US$2.0 million in newconvertible debenture financing.

In addition, Inca One announced a US$3.0 million convertibledebenture offering. The convertible debentures will carry a 10% annual interestrate, payable quarterly in arrears and will have a 24-month term.

The debentures will be secured by movable inventory of thecompany's Peruvian operating subsidiary, Chala One. In addition, the company agreed toassign the debentures priority security after full repayment of its existingUS$500,000 convertible debt.

The company plans to use the proceeds from the offering forrestructuring costs, mineral purchases, and related inventory and supplies forChala One, in addition to working capital that will enable it to increase itscapacity to full 100 tonnes per day, over the coming months.

Under the restructuring agreement, Inca One plans to convertapproximately 50% of its debt into common shares at 11 Canadian cents pershare. It will cancel and reissue approximately 30% of the debt into newconvertible debentures. Furthermore, it plans to convert approximately 20% ofthe remaining debt into either contingent debts payable or a warrant deposit.

The company does not plan to restructure US$500,000 of itsexisting convertible debt, because of its priority security over certaincompany assets.

Inca One already has a commitment for US$1.0 million relatedto its convertible debt financing. The company plans to close both transactionsin the coming month.