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Etruscan Resources is a gold-focused junior mining company.
Under the terms of the agreement, Endeavour Financial will purchase 153,123,000 common shares of Etruscan Resources at a price of CAD0.30 ($0.28) each.
Simultaneously, Endeavour Financial has also agreed to purchase 26,315,789 shares, representing a 16.5% stake, in Etruscan Resources and 6,855,760 Etruscan Resources share purchase warrants from Kirkland Intertrade Corp. and 2190776 Ontario, Inc.
Pursuant to both transactions, Endeavour Financial will hold approximately 54% of the issued and outstanding common shares of Etruscan Resources on a post-closing basis, assuming the exercise of all of the share purchase warrants.
Deal Value (US$ Million) 43 Deal Type Private Placement Sub-Category None Deal Status Announced: 2009-09-23
Deal Participants
Target (Company) Etruscan Resources, Inc. Acquirer (Company) Endeavour Financial Corporation
Deal Rationale
The private placement is part of a comprehensive financial re-engineering being undertaken by Etruscan Resources which is to include a substantial restructuring of Etruscan Resources' debt facilities. Etruscan Resources intends to use the proceeds from the placement to repurchase approximately 50% of Etruscan Resources' $700 per ounce gold call options; approximately $8.50 million to repay outstanding unsecured convertible debt; $5 million for working capital purposes and improvements at the Youga Gold Project; and approximately US$6.50 million to for general corporate working capital requirements. The investment will provide Etruscan Resources to facilitate a restructuring of the senior debt facility and related hedging provided by RMB Australia Holdings Ltd. and Macquarie Bank Limited to finance the development of the Youga Gold Project. Reducing the gold call positions by 50% will enhance current operating cash flow and improve Etruscan Resources' equity market profile. The hedge reduction, together with the senior lenders' proposed deferral of principal payments on the Youga senior debt facility until December 31, 2010, will provide significant relief from current financial pressures and will allow Youga sufficient time to reach targeted production levels.
Offer Price ($ per share) 0.28 No. Shares Issued 153123000
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