Imperial Metals extends credit facilities

The company also announces that it has agreed to refinance US$98 445 000 of its 7% US$325 million Senior Unsecured Notes due 15 March 2019 (the Senior Notes).The company has requested that Edco Capital Corporation (Edco), and Edco has agreed, to subscribe for US$98 445 000 of additional Senior Notes (principal amount of US$1000 each) on the same terms and conditions as the existing Senior Notes. Such funding will enable the company to repay an equal dollar amount of the principal of the Senior Notes that are payable in full Friday 15 March 2019, being US$98 445 000. The remaining existing holders of Senior Notes in the principal amount of US$226 555 000 have agreed, as has Edco in respect to the additional Senior Notes, to extend the maturity date of the Senior Notes until 15 September 2019. The refinancing and extension of the maturity date of the Senior Notes, as described, is a requirement to achieve the loan extensions set out above.

As Edco is a related party of the Company, the issue of additional Senior Notes to Edco is a related party transaction. Accordingly, the transaction was considered and unanimously approved by the directors of the company who are independent of Edco and its affiliates and who do not own any of the Senior Notes (the Independent Directors), and by the full Board of Directors of the company after considering both legal and financial advice from external advisors.

The Independent Directors and the full Board of Directors both unanimously concluded that the company could utilise existing exemptions from formal valuation requirements and minority vote requirements of applicable related party transaction securities rules on the basis of the serious financial difficulty facing the company in the interim period pending completion of the previously announced transaction with Newcrest Mining Limited (Newcrest). The Newcrest asset purchase and joint venture transaction, which is subject to a number of closing conditions, when completed will permit the company to repay the Senior Notes as well as the other above mentioned credit facilities in full. The Independent Directors and the full Board of Directors also unanimously concluded that the company could also rely on another exemption from the minority vote requirement as the additional Senior Notes represent non convertible indebtedness being issued to Edco on commercially reasonable terms that are not less advantageous to the company than arms length third party terms.

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