Silvermet Inc.

Silvermet Inc.

March 03, 2009 10:32 ET

Silvermet Inc. Announces Project Financing

TORONTO, ONTARIO--(Marketwire - March 3, 2009) -


Silvermet Inc. ("Silvermet" or the "Company") (TSX VENTURE:SYI) is pleased to announce a debt financing of up to $3 million with Cooper Island Investments, LLC.("Cooper Island"), a company related to its major shareholder, Greyling Investments Inc., which holds approximately 15.7% of Silvermet's common shares. The financing is a loan of up to US$3 million to be released in tranches of US$500,000, at the discretion of Cooper Island. The initial tranche, which has been drawn down, bears interest at 12% and matures on February 21, 2010. The loans are repayable at any time without penalty. Additionally, Cooper Island is entitled to receive 3.4 warrants to acquire common shares of Silvermet per US$1 advanced.

In connection with the initial tranche of the loan, Silvermet will issue Cooper Island 1.7 million warrants exercisable at a price of $0.10 per share for the lesser of the term of the loan or 5 years, should there be any loan maturity extensions. The exercise price per share of warrants to be issued in connection with subsequent tranches of the loan, if any, will be the greater of $0.10 or the market price of Silvermet's common shares at the time of the grant. The issuance of the warrants is subject to the approval of the TSX Venture Exchange.

Cooper Island is under no obligation to make any additional advances beyond the initial $500,000. In the event Cooper Island does elect to advance additional funds to the Company, the remaining tranches have terms of 3 years and bear interest at 8% for year 1, 12% for year 2 and 14% for year 3. If subsequent advances are made under the loan facility, the initial advance is to be rolled into the 3 year term. All principal amounts are payable upon maturity.

Silvermet is also raising up to $1.5 million in equity through brokered and non-brokered private placements of units at $0.05 per unit. Each unit is comprised of one common share and one-half warrant, with each whole warrant being exercisable for one common share at a price of $0.10 per share for a term of 18 months, which term can be accelerated if Silvermet shares trade above $0.20 per share for 20 consecutive trading days. In connection with the brokered private placement, Silvermet has engaged D&D Securities Ltd. to act as its agent to offer the units on a best-efforts basis.

Silvermet is using the financings for its acquisition of the Turkish EAFD processing operations utilizing a Waelz kiln and the costs of improving and restarting operations in the second quarter, 2009. (See Press Release of February 19, 2009).

Caution concerning forward-looking statements: The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raised additional financing. Readers are cautioned not to place undue reliance on this forward-looking information. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events except as may be required under applicable securities laws. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

The TSX Venture Exchange has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Silvermet Inc.
    Stephen G. Roman
    Chairman & CEO
    (416) 203-8336
    (416) 368-5146 (FAX)
    Silvermet Inc.
    Rein A. Lehari
    President & COO
    (416) 203-8336
    (416) 368-5146 (FAX)