SOURCE: LeadFX Inc.

LeadFX Inc.

December 16, 2015 17:05 ET

LeadFX Announces Bridge Financing From Majority Shareholder

TORONTO, ON--(Marketwired - December 16, 2015) - LeadFX Inc. (the "Company" or "LeadFX") (TSX: LFX) is pleased to announce that it has refinanced the secured debt owed to Sprott Resources Lending Partnership ("Sprott") through the assignment of the debt to its majority shareholder, Enirgi Group Corporation ("Enirgi Group") and amendment of certain terms. The debt refinancing will eliminate the Company's obligations to Sprott, defer monthly interest payments until the maturity date and reduce the interest rate. The debt refinancing also provides the Company with more time to conclude discussions with potential lenders, equity investors and streaming companies for a long term financing solution.

As part of the debt refinancing, the Company, Sprott, and Enirgi Group have entered into an assignment of indebtedness and security agreement (the "Assignment Agreement"), whereby Enirgi Group will pay the outstanding principal and interest owed to Sprott and assume (i) the credit agreement entered into by the Company, Sprott, and certain subsidiaries of the Company (the "Credit Parties") dated January 29, 2013, as amended (the "Credit Agreement"), (ii) certain security and certain guarantees granted by the Company and the Credit Parties as set out in the Credit Agreement (collectively, the "Security"), and (iii) the principal amount outstanding under the Credit Agreement as at December 15, 2015, being CAD$9,665,107.10. The Assignment Agreement is subject to approval of the Toronto Stock Exchange ("TSX") and will close immediately following TSX approval.

In connection with the Assignment Agreement, Enirgi Group has agreed to extend the maturity date for repayment of the principal under the Credit Agreement to March 31, 2016 and to reduce the interest rate from 12% to 10% per annum. Enirgi Group has also agreed to forbear from enforcing its rights under the Credit Agreement until March 31, 2016. All other terms of the Credit Agreement will remain the same.

"On behalf of the Board and the management team, I would like to thank our longtime partner, Sprott, for their continued support over the years. In addition, we would like to thank Enirgi Group for their continued support as LeadFX plans for the potential restart of the Paroo Station Mine," said Robert Metcalfe, Chairman of the Special Committee.

Additional information on LeadFX can be found on SEDAR at www.sedar.com and the Company's website at www.leadfxinc.com

About Lead FX

LeadFX is a Canadian-based mining company focused on the development of lead-silver projects located in stable jurisdictions. Our current portfolio includes a restart-ready lead operation in Western Australia and a development project in Utah, USA. The Company is developing opportunities at its new properties in North America to underpin future cash flow and growth. LeadFX trades under the symbol "LFX" on the Toronto Stock Exchange.

Forward-Looking Statements

Certain statements contained in this news release are forward-looking information within the meaning of securities laws. All statements included herein (other than statements of historical facts) which address activities, events or developments that management anticipates will or may occur in the future are forward-looking statements, including statements as to the following: LeadFX's ability to meet its working capital needs and debt repayments in the near term, forbearance by Enirgi Group pursuant to the amendment to the Credit Agreement, discussions with potential lenders, equity investors and streaming companies, TSX approval of the Assignment Agreement and terms of the amendment to the Credit Agreement, the timing and length of care and maintenance at the Paroo Station Mine (the "Mine") and future sales, future targets and estimates for production and sales, the receipt of required additional financing to restart and operate the Mine, statements relating to the business and future activities of, and developments related to LeadFX, and its subsidiaries, including the development of water, lead and silver assets, future business acquisitions, future lead production, the cost and timing for completion of capital projects necessary for any future operations, grades and future lead prices, Mineral Resources, Mineral Reserves, life of mine, recovery rates, grades and prices, business strategies and measures to implement such strategies, competitive strengths, estimated goals and plans for LeadFX's future business operations, lead market outlook and other such matters. Forward looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "contemplate", "target", "believe", "plan", "estimate", "expect", and "intend" and statements that an event or result "may", "will", "can", "should", "could" or "might" occur or be achieved and other similar expressions. These statements are based upon certain reasonable factors, assumptions and analyses made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. However, whether actual results and developments will conform with management's expectations is subject to a number of risks and uncertainties, including factors underlying management's assumptions, such as, expected concentrate sales when in operation, the costs and other capital expenditures required to maintain operations and transportation, the timing, need and ability to raise additional financing and the risks relating to ramping up mining and milling throughput and operations, funding requirements, the restart of mining and milling operations, matters relating to regulatory compliance and approvals, shareholder dilution, regulatory proceedings and litigation and general operating risks such as metal price volatility, lead carbonate concentrate treatment charges, exchange rates, health and safety, environmental factors, mining risks, metallurgy, labour and employment regulations, government regulations, insurance, dependence on key personnel, the nature of mineral exploration and development and common share price volatility. Additional factors and considerations are discussed in LeadFX's 2014 annual information form dated March 10, 2015, management information circular September 14, 2015 and elsewhere in other documents filed from time to time by LeadFX with Canadian securities regulatory authorities and available on SEDAR at www.sedar.com. While LeadFX considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. These factors may cause the actual results of LeadFX to differ materially from those discussed in the forward-looking statements, and there can be no assurance that the actual results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected results on LeadFX. Undue importance should not be placed on forward-looking information nor should reliance be placed upon this information as of any other date. Except as required by law, while it may elect to, LeadFX is under no obligation and does not undertake to update this information at any particular time.

Contact Information

  • For further information please contact:
    LeadFX Inc.
    Jessica Helm
    VP, Corporate Communications
    Suite 3001, 1 Adelaide Street East
    Toronto, Ontario M5C 2V9
    (416) 867 9298
    Email: info@leadfxinc.com