SAGUENAY, QUÉBEC–(July 26, 2012) - Arianne Resources Inc. (the “Company” or “Arianne”)(TSX VENTURE:DAN)(FRANKFURT:JE9N)(OTCBB:DRRSF) is pleased to announce that it has entered into a Cdn$10 Million credit facility and has arranged a Cdn$1 Million non-brokered private placement. The credit facility can be drawn on as required and will allow the Company to fund its bankable feasibility study, operations and permitting activities on the Lac a Paul phosphate project (the “Project”) estimated to be completed at the end of 2013 or early 2014.
Under the terms of the credit facility, Arianne can draw up to Cdn$10 million dollars. The secured credit facility will bear interest at a variable rate equal to 500 basis points over 3-month Canadian LIBOR (currently at 1.298% or 6.298% total) with the interest capitalized through the end of 2013 and maturing on December 31, 2015. Additionally, the Company will issue the lender 4 million warrants, of which 1.5 million warrants have an exercise price of Cdn$0.88/share and 1.5 million warrants at Cdn$1.32/share. The remaining 1 million warrants will be issued at Cdn$0.88/share but will include a provision that they must be exercised within 30 days following a 20 consecutive trading day period over which the common shares of the Company trade above Cdn$1.32, beginning January 1, 2013. All the warrants are exercisable through December 31, 2015. Lastly, Arianne has also provided the lender with a Cdn$1/tonne production fee on all phosphate concentrate sales from the Project. The production fee can be repurchased at anytime for a lump sum payment of Cdn$6 million. In connection with this transaction, Arianne will pay on closing an arrangement fee of Cdn$100,000 to the agent and a commitment fee of Cdn$200,000 to the lender.
“This financing is a significant step forward for Arianne,” said Bernard Lapointe Chairman & CEO of the Company. “With this funding committed, we can now focus on accelerating the completion of our bankable feasibility study and securing the necessary permits to develop our world-class Lac a Paul phosphate mining project.”
“The structure of this innovative deal is very beneficial to our shareholders,” added Jim Cowley, President of Arianne. “There is minimal dilution to Arianne’s shareholders, a low interest rate, and deferral of actual cash payments until the time when Arianne’s project development is more advanced and we are in a better position to repay them. This financing allows us to aggressively move our Lac a Paul phosphate project towards production without having to be concerned with the state of the capital markets or be reliant on other sources of finance. ”
Closing of the transaction should occur within the next 45 days and is subject to customary due diligence, execution of final documentation customary to this type of transaction and regulatory approvals.
Under the terms of the private placement, Arianne will issue up to 1.1M flow-through common shares at $0.92 per share for proceeds of $1,012,000. The Company will pay a finder’s fee in conjunction with the private placement in cash of up to 8% of the proceeds raised and will issue non transferable warrants equal to a maximum of 8% of the flow-through common shares issued under the private placement. The non transferable warrants will be priced at $0.92 and will be exercisable for 24 months following closing of the private placement.
Arianne Resources Inc. (www.arianne-inc.com) owns and is developing the Lac a Paul phosphate deposit that produces a superior grade apatite concentrate grading close to 39% P2O5. The Company currently has 67 M shares issued.
Forward Looking Statements and Information
This news release contains “forward-looking statements” and “forward-looking information” within the meaning of applicable securities regulations in Canada and the United States (collectively, “forward-looking information”). The forward-looking information contained in this news release is made as of the date of this news release. Except as required under applicable securities legislation, the Company does not intend, and does not assume any obligation, to update this forward-looking information. Forward-looking information includes, but is not limited to, statements with respect to estimated mineral resources, anticipated effect of the completed drill results on the Project, timing of a feasibility study, and timing and expectations of future work programs. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects, “is expected”, “budget”, “scheduled”, “estimates”, forecasts”, “intends”, “anticipates”, or “believes”, or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, or “will” be taken, occur or be achieved.
Any forward-looking statement speaks only as of the date on which it is made and except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement.
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