Silvermet Inc.

Silvermet Inc.

April 03, 2009 09:00 ET

Silvermet Inc. Announces Revised Financing

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


Silvermet Inc. ("Silvermet" or the "Company") (TSX VENTURE:SYI) announces that it has entered into a "Heads of Agreement" with Cooper Island Investments, LLC. ("Cooper Island") providing for a revised financing arrangement with Cooper Island. As previously announced on March 3, 2009, Silvermet and Cooper Island entered into a loan agreement dated Feburary 20, 2009 pursuant to which Cooper Island provided a loan of US$500,000 to Silvermet. In addition, Cooper Island agreed to provide additional loans to Silvermet at its discretion in US$500,000 tranches up to an aggregate total principal amount of US$3 million. Under the new Heads of Agreement, the parties have agreed to amend the terms of the initial loan agreement to provide for the immediate advance by Cooper Island of an additional US$500,000 to Silvermet on the same terms and conditions as the original loan, including the issuance by Silvermet to Cooper Island of an additional 1.7 million warrants. In addition, Cooper Island has agreed to invest up to a total of US$4,000,000 to acquire shares of SYI Metalurji Madencilik Sanayi ve Ticaret A.S. ("SYI"), Silvermet's Turkish subsidiary that was established to acquire the Waelz kiln assets in Turkey.

On the completion of definitive documentation for the revised financing arrangement and receipt of all required approvals, the principal amount outstanding under the existing debt facility, currently US$1 million, will be repaid through the issuance to Cooper Island of that number of shares of SYI representing a 6.25% interest in SYI for each US$500,000 principal amount of debt outstanding. Prior to receipt of the required approvals, Cooper Island may advance additional amounts under the loan and any additional amounts will also be repaid in shares of SYI on the same basis. On the satisfaction of the existing debt facility, all Silvermet warrants issued to Cooper Island in connection with that facility will be forfeited and cancelled. Thereafter, Silvermet can require Cooper Island to make addition equity investments in SYI in US$500,000 tranches and for each US$500,000 invested Cooper Island will receive an additional 6.25% equity interest in SYI. If Silvermet requests investment of the full US$4 million, Cooper Island will hold a 50% equity interest in SYI.

The revised financing arrangement with Cooper Island will allow Silvermet to bring its Turkish kiln into production without the overhang of a debt burden.

The revised financing arrangement is a related party transaction for Silvermet pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions ("MI 61-101") as Cooper Island's affiliate, Greyling Investments Inc., currently owns directly or indirectly or has direction or control over more than 10% of the issued and outstanding common shares of Silvermet. In accordance with MI 61-101, the revised financing arrangement must be approved by a majority of the minority shareholders of Silvermet. Silvermet will be relying on an exemption from the requirement under MI 61-101 to obtain a formal valuation in respect of the transaction available to issuers that are not listed on the Toronto Stock Exchange or another senior exchange. In addition to shareholder approval, the revised financing arrangement will require the approval of the TSX Venture Exchange.

About Silvermet

Silvermet is focused on producing zinc, lead, and other by-products from the recently acquired assets of Metox A.S. in Turkey. These assets are currently undergoing an upgrading prior to the recommencement of operations in the second quarter, 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this 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)