International Wayside Gold Mines Ltd.
TSX VENTURE : WGM
FRANKFURT : IWUA

International Wayside Gold Mines Ltd.

December 29, 2006 15:09 ET

International Wayside Gold Mines Ltd.: Brokered US$10,000,000 Senior Secured Debt Financing

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 29, 2006) - The Board of Directors of International Wayside Gold Mines Ltd. (the "Company") (TSX VENTURE:WGM)(FWB:IWUA) is pleased to announce that an agreement has been reached with Karver Capital Holdings Limited (the "Principal Lender"), a private investment firm headquartered in Europe, on a brokered senior secured debt financing of US$10,000,000 in one or more tranches (the "Loan"), led by Octagon Capital Corporation as agent. Conversion privileges relating to the Loan (as described below) shall be subject to regulatory and shareholder approval.

CDN$3,500,000 of the proceeds from this financing will be used to pay the final amounts owing under the Company's option agreement with Mosquito Consolidated Gold Mines Limited ("Mosquito"). The Company will then have sole ownership of the mineral claims at the heart of the Cariboo Gold Camp. The remaining proceeds will be used to settle all outstanding litigation, clear all liens on all properties, settle certain accounts payable and general working capital purposes.

The Principal Lender, through or in concert with one or more nominees, including Karver Capital Canada Inc., a subsidiary of the Principal Lender (collectively the "Lenders"), will advance to the Company US$ 3,772,352 as a bridge loan on or about December 29, 2006 (the "Bridge Advance").

The Loan is subject to 10% interest per annum, to be accrued and calculated monthly. The Loan is to be secured by one or more general security agreements and such other reasonable security against the assets of the Company as the Lenders require. Subject to regulatory approval, bonus warrants (each a "Bonus Warrant") equivalent to 33.3% of the amounts advanced pursuant to the Loan are to be issued in respect of amounts advanced pursuant to the Loan. Each Bonus Warrant entitling the holder thereof to acquire a common share of the Company upon payment of CDN$0.30 within 24 months from the Closing Date, with a forced exercise provision attached to each Bonus Warrant commencing on the day following (a) the conversion of the applicable Note and (b) the expiry of any applicable hold period on the underlying Common Share, stating that if, for ten consecutive trading days, the closing price of the listed shares of the Company exceeds $1.00 then the exercise period of the Bonus Warrants will be reduced to a period of 30 days following such trading days. Based on current exchange rates the approximate value of the Bonus Warrants would be CDN$3,862,333 represented by approximately 12,877,777 Bonus Warrants. The aggregate number of Warrants (defined below) to be issued pursuant to this term sheet shall be reduced and set-off by the number of Bonus Warrants issued pursuant to this term sheet. The Loan will mature on June 29, 2007.

Subject to regulatory and shareholder approval, each holder of notes and accumulated interest relating to the Loan (each a "Note") shall be entitled to convert each Note to units of the Company ("Units"), each Unit consisting of one common share and one half of one common share purchase warrant (each whole warrant being a "Warrant"). Each whole Warrant shall entitle the holder to acquire one common share of the Company upon payment of CDN$0.30 within 24 months from the closing date, with a forced exercise provision attached to each Warrant commencing on the day following (a) the conversion of the applicable Note and (b) the expiry of any applicable hold period on the underlying common shares, stating that if, for ten consecutive trading days, the closing price of the listed shares of the Company exceeds $1.00 then the exercise period of the Warrants will be reduced to a period of 30 days following such trading days.

Any such conversion, as described above, shall be based on the following formula:

Total number of Units equals total accumulated value of Note / CDN$0.25

The conversion privileges described above may only be exercised if and when the Company obtains all regulatory and shareholder approval. If shareholder and/or regulatory approval is not obtained (or if the permitted conversion substantially differs from the terms described in the term sheet), each holder will have the right to either (1) convert at the terms permitted by regulators and shareholders; or (2) redeem its Notes. The securities to be issued will have certain anti-dilution rights and the Lenders will have certain rights of first refusal entitling them to participate in future financings.

Upon the advance of US$10,000,000, if the Lenders convert all of the outstanding Notes to common shares in the Company on June 29, 2007, the Lenders will obtain approximately 48,667,436 common shares of the Company and 24,333,718 Warrants based on current currency exchange rates. If the Warrants are exchanged for common shares, the total common shares obtained by the Lenders would represent approximately 63% of the outstanding common shares of the Company or approximately 55% of the fully diluted outstanding shares of the Company.

Pursuant to the agreement with the Principal Lender, it is presently expected that the Lenders will nominate an additional director to join the board of directors of the Company sometime in 2007 prior to the Loan maturing.

According to Frank Callaghan, President and CEO of the Company: "This financing is a very exciting development for International Wayside. Not only will this arrangement provide for the purchase of 100% interest in key land holdings in the Cariboo Gold Project, it also provides the company with sufficient funds for critical exploration targets."

Octagon Capital Corporation will receive a cash commission of 5% of the gross proceeds of the Loan and an option to purchase up to 6.8% of the number of Units which the Loan may be convertible into. Additional finder's fees of an aggregate of 5% cash of the gross proceeds of the Loan and an option to purchase up to 3.2% of the number of Units which the Loan may be convertible into also will be paid.

The Company commenced operations in the Cariboo District in 1994 and since that time has focused on the exploration and development of its gold properties. After the final property payment of $3,500,000 to Mosquito, the Company will obtain 100% ownership of "The Cariboo Gold Project" which encompasses 574.8 km2 and is located at Wells near the historic town of Barkerville in central British Columbia, the terminus of the Cariboo Gold Rush of the 1860's. In the Barkerville Camp, 79 creeks have reported placer gold production. Recorded production from the Cariboo Gold Camp is 3.8 million ounces of gold, including 2.6 million ounces from placer mining and 1.2 million ounces from lode mining.

Pursuant to National Instrument 43-101, Mr. Jian-Zhao Yin, Ph.D., P.Geo, a qualified person, has reviewed this News Release.

On Behalf of the Board of Directors

J. Frank Callaghan, President and CEO

This new release contains forward-looking statements regarding the timing and content of upcoming programs. Actual results may differ materially from those currently anticipated in such statements.

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • International Wayside Gold Mines Ltd.
    J. Frank Callaghan
    President and CEO
    (604) 669-6463 or Toll Free: 1-800 663-9688
    (604) 669-3041 (FAX)
    Website: www.wayside-gold.com