The initial principal amount of the EVBC Loan was $64 million with proceeds primarily used to complete the construction of the EVBC Mines. The principal balance outstanding on April 2, 2014 was $37.5 million. The amendments, expected to be effective July 11, 2014 (the "Effective Date"), will result in a new maturity date of November 30, 2014 (the "New Maturity Date") and a number of principal repayments as set out below from (i) restricted cash, Copperwood proceeds and working capital, (ii) required quarterly principal repayments, and (iii) the closure of outstanding derivative instruments:
At this time, Orvana intends to repay the outstanding principal on the New Maturity Date from working capital. Under the amendment to the EVBC Loan certain financial covenants and non-compliance matters have been waived until the New Maturity Date.
"The restructuring of the EVBC Loan has been one of our objectives. We expect that following the full repayment of the loan, we will have additional financial flexibility across the organization to pursue our business objectives," said Michael Winship, President and Chief Executive Officer.
As a condition to the amendments to the EVBC Loan, Orvana had to establish a working capital line of credit in the minimum amount of US$6.5 million until the New Maturity Date. As a result, Orvana is in the process of establishing a working capital line with Fabulosa Mines Limited, the Company’s 51.9% shareholder until December 31, 2014 on similar terms as the Fabulosa Loan as described in the MD&A dated May 14, 2014. In connection with this facility, the Company will pay a structuring fee of 2% for a total of $130,000 and issue warrants to Fabulosa to purchase 100,000 Common Shares exercisable for five years at an exercise price of $0.54, subject to the approval of the Toronto Stock Exchange.
