Avanti Mining Inc. announces that Resource Capital Fund IV L.P. has agreed to convert US$15,116,667 of the existing Convertible Bridge Loan into units of Avanti at a conversion price of C$0.16 per unit. Each Unit will consist of one common share and one half of one share purchase warrant. Each whole warrant will give RCF the right to purchase one share for a period of four years from the date of issuance at a 35% premium to the above mentioned conversion price. RCF has further agreed to fix the conversion price of the remaining loan of US$5,000,000 to be equal to the price at which Avanti makes an equity offering.
With this conversion, RCF will receive 101,961,919 common shares and 50,980,959 warrants, bringing their current ownership in the company to 133,657,339 shares, or 52.6%. RCF has the right to participate on a prorated basis to maintain a 40% ownership in Avanti and has no other pre-emptive rights.
This agreement is subject to TSX-V approval and documentation and approval by a majority of the shares, other than shares held by RCF, voted at a shareholders’ meeting of Avanti called to approve the transaction. Definitive Agreements are expected to be executed on or before September 30, 2009, with closing to follow shareholder approval. At the conclusion of this transaction, Avanti will have 253,998,362 shares issued and outstanding.
Craig J. Nelsen, President and CEO, commented, “We are delighted that RCF has agreed to convert a majority of its existing debt to share ownership, which reflects their long term commitment to Avanti, and at the same time removes uncertainty in Avanti’s capital structure to both existing and potential shareholders.”
Avanti is focused on the development of the past producing Kitsault molybdenum mine located north of Prince Rupert in British Columbia.