January 7th, 2014 – Vancouver, British Colombia – Altan Rio Minerals Limited (“Altan Rio” or the “Company”) announces that the European Bank for Reconstruction and Development (“EBRD”) has agreed to provide equity financing to the Company for the furtherance of the Company’s Mongolian operations.
EBRD has 61 shareholders (59 Governments and 2 International Institutions) and invests in 29 countries from central Europe to central Asia.
EBRD is the largest institutional investor in Mongolia. Mongolia became an EBRD country of operations in October 2006 and since the beginning of its operations in Mongolia, the EBRD has committed through debt and equity investments more than US$ 684 million to the Mongolian private sector through 52 projects in sectors ranging from banking to manufacturing and from mining to agribusiness.
Mr Evan Jones, President & CEO of Altan Rio commented:
“We are delighted to have attracted a partner of the calibre of EBRD.”
“As shareholders will be aware, the ability for junior explorers such as Altan Rio to raise capital to fund ongoing activities is somewhat limited in the current market environment. As such, by entering into this agreement, Altan Rio has substantially reduced financing uncertainty.”
EBRD has agreed to purchase, on a private placement basis, 16,666,000 common shares of the Company at a price of $0.06 per share as a first tranche subscription (the “First Tranche Subscription”) pursuant to a larger potential investment referred to hereafter.
The First Tranche Subscription is made by EBRD pursuant to a Subscription Agreement and Framework Agreement (the “Financing Agreements”) entered into between EBRD and the Company. Under the Financing Agreements, EBRD has committed to invest a minimum of $5,000,000 (subject to certain limitations as referred to hereafter) and a maximum of $10,000,000 to purchase common shares of Altan Rio under the First Tranche Subscription and a series of subsequent private placements in minimum tranches of $1,000,000 each (“Subsequent Tranche Subscriptions”). Each Subsequent Tranche Subscription will be triggered by a notice from the Company requesting funds and providing certain other required information. The size of each tranche will be dependent on the amount requested by the Company and agreed to by EBRD, with the price per share to be subject to agreement between the parties based on the market price for the Company’s shares at the time and the requirements of Exchange policies.
The First Tranche Subscription is subject to a number of conditions precedent including among other things:
- Exchange approval,
- the conversion of loans made to the Company by certain of its principals and non-related parties into shares of the Company, and
- the Company obtaining certain required government documentation in connection with its continuing exploration activities in Mongolia.
Each Subsequent Tranche Subscription will be subject to a number of conditions precedent including among other things:
- Exchange approval,
- any necessary shareholder approvals being obtained,
- outside investors having subscribed for common shares of the Company at least equal in number to the number of shares to be purchased by EBRD, at the same subscription price,
- the continued compliance by the Company with the Financing Agreements and the agreed business plan, and
- EBRD’s total shareholding in the Company following the Subsequent Tranche Subscription not exceeding 35% of the Company’s issued and outstanding shares.
The Financing Agreements also provide for the Company to adhere to an agreed business plan with respect to its ongoing exploration activities in Mongolia, to report quarterly and annually to EBRD with respect to ongoing operations, and to obtain EBRD’s consent to certain material changes in the Company’s business, material corporate reorganizations and certain other material events including outside equity financings. The Financing Agreements also require certain principal shareholders of the Company to maintain a threshold shareholding in the Company and to make specified time and work commitments to the Company’s affairs. EBRD also has participation rights with respect to future proposed debt and equity financings. EBRD is entitled to appoint a director to the Company’s Board and to appoint a non-voting observer to attend Board meetings. Certain of the foregoing obligations are subject to EBRD holding at least 5% of the Company’s shares or a minimum investment of $5,000,000.
The proceeds from the First Tranche Subscription in the sum of approximately $1,000,000 will be employed to advance the Company’s exploration activities in Mongolia and to provide working capital.
The transaction is subject to Exchange approval.
About Altan Rio
Altan Rio, founded in 2007, is based in Vancouver BC, Canada. Using innovative exploration targeting techniques and leveraging long-term in-country experience, the company explores large-scale gold and copper projects in Mongolia, one of the world’s most prospective mineral regions. The Company’s license holdings in Mongolia, which total more than 103,341 hectares (255,361 acres), contain significant zones of newly identified primary gold and copper mineralization across a very large area of unexplored ground.
On behalf of Altan Rio Minerals Limited,
Evan Jones, President & CEO
For more information please contact:
Altan Rio Minerals Limited
Tel: +1 604 639 5899
Email: [email protected]
This press release may contain forward looking statements including those describing Altan Rio’s future plans and the expectations of management that a stated result or condition will occur. Any statement addressing future events or conditions necessarily involves inherent risk and uncertainty. Actual results can differ materially from those anticipated by management at the time of writing due to many factors, the majority of which are beyond the control of Altan Rio and its management.