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Cambridge Mineral raises 135,000, amends financing arrangements

12th Dec 2008, 12:34 pm Cambridge Mineral raises 135,000, amends financing arrangements

Cambridge Mineral Resources PLC (CMR) said it raised £135,000 before expenses through placing 13.5 million new ordinary shares, and it plans to use the money for general working capital purposes and to assist  in  the development  of  its  portfolio, particularly in South  America  where  it  has  recently commenced production in Colombia.


In a separate statement, the company said amendments have been made to certain terms of the existing financing arrangements for the development of its Colombian gold projects.


These financing arrangements were put in place to fund the development of up to three of CMR's gold mine projects in the country, including the Quintana Gold mine which commenced production on November 9 2008.


Under the new terms CMR will pay its lender a higher amount of gold ounces from Quintana as prepayment from start of the mine - 13,691 instead of 11,750 - , and the previously envisaged period over which it will make the gold available will be extended to 39 months from 36. Development of Quintana took longer than expected mainly due to adverse weather conditions and the cost rising by US$500,000 to US$6 million due primarily to adverse currency fluctuations.


In addition, the lender has requested that the exercise prices of any warrants to be granted upon subsequent prepayments be amended to be at the closing mid-market price of the company's shares as at the date of signing any such further prepayment arrangement rather than at a 25 percent premium to the then market price, as previously envisaged.  The company has agreed to this, pending shareholder approval.


Under the terms of the financing deal, prepayment for each of the three mines it covers is to be accompanied by the grant of warrants in the company, equivalent upon exercise to 15 percent of the company's issued share capital for the first prepayment, 10 percent for the second prepayment and 5 percent for the third.

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