Grande Cache Coal Corporation
TSX : GCE

Grande Cache Coal Corporation

January 28, 2008 08:30 ET

Grande Cache Coal Corporation Announces $37.5 Million Secured Convertible Debenture and Revolving Credit Facility Financing

CALGARY, ALBERTA--(Marketwire - Jan. 28, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.

Grande Cache Coal Corporation (TSX:GCE) ("Grande Cache Coal") announced today that it has signed a term sheet with Brookfield Bridge Lending Fund Inc. ("Brookfield"), the company's existing senior lender, for a $17.5 million three year floating rate senior secured convertible debenture (the "Convertible Debenture") and a secured revolving credit facility for an amount up to $20.0 million (the "Revolving Facility"), subject to a borrowing base calculation. The proceeds from the Convertible Debenture will be used to fully repay the company's existing term facility with Brookfield and for general corporate purposes. Proceeds from the Revolving Facility will be used for general purposes. Closing of the financing is expected to occur on or about February 15, 2008 and is subject to regulatory approval.

The Convertible Debenture will mature three years from closing (the "Maturity Date"). Interest will accrue on the Convertible Debenture at a variable annual rate equal to a Canadian chartered bank's prime lending rate plus 1.75 percent per annum, calculated daily and compounded monthly. The Convertible Debenture will be convertible at Brookfield's option into common shares of the company ("Common Shares") at the earlier of any time prior to the Maturity Date and the business day immediately preceding the date fixed by Grande Cache Coal for redemption at a conversion price of $1.825 per Common Share (the "Conversion Price").

Grande Cache Coal may redeem the Convertible Debenture at any time in multiples of $250,000 on 30 days notice at a redemption price equal to 107% of the principal amount being redeemed plus accrued and unpaid interest. In addition, at any time after six months from closing, Grande Cache Coal may require Brookfield to convert 50% of the Convertible Debenture at the Conversion Price, provided that the 15 day volume weighted average trading price ("VWAP") (on volumes of at least 300,000 Common Shares for 15 consecutive trading days) of the Common Shares on the company's principal stock exchange exceeds $2.50 per share. Grande Cache Coal may require Brookfield to convert the balance of the Convertible Debenture in the event the 15 day VWAP of the Common Shares exceeds $4.00 per share.

The Convertible Debenture is non-transferable except to affiliates of Brookfield and funds managed by Brookfield or its affiliates. Upon Brookfield converting the Convertible Debenture and holding at least 10% of the outstanding Common Shares, Brookfield will have the right to appoint one individual to the Board of Directors of Grande Cache Coal.

About Grande Cache Coal

Grande Cache Coal is an Alberta-based metallurgical coal mining company whose experienced team of coal professionals are managing a mine that produces metallurgical coal for the steel industry and holds coal leases covering approximately 22,000 hectares in the Smoky River Coalfield located in west-central Alberta. Grande Cache Coal's common shares are listed on the Toronto Stock Exchange under the trading symbol "GCE".

Reader Advisory

This news release does not constitute an offer to sell or the solicitation of an offer to buy the Convertible Debenture or Common Shares within the United States. The Convertible Debenture or Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, the Convertible Debenture and the Common Shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities law or an exemption from such registration is available.

Certain information in this news release contains forward-looking statements including expectations of the closing of the financing on the terms set forth above and the timing of such closing. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Grande Cache Coal's control including, without limitation, changes in general economic, market and business conditions, uncertainty related to the completion of the financing and the failure to obtain required approvals, and stock market volatility. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could effect Grande Cache Coal's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Grande Cache Coal's website (www.gccoal.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Grande Cache Coal does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Contact Information

  • Grande Cache Coal Corporation
    Anita L. Roncin
    Vice President, Finance and Chief Financial Officer
    (403) 543-7070
    (403) 543-7092 (FAX)
    Website: www.gccoal.com