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Mining industry

Teddy Bear Valley Mines Secures $5.39 Million Financing, Boosts Gold Production

Strategic Insights

— 1 min read

Teddy Bear Valley Mines, Limited has entered into a $2 million private placement and a $3.39 million credit facility to fund its gold mining operations. The company will use the funds to fulfill its contributions to the Holloway Joint Venture's mine construction program and repay its existing debt. With the additional financing, Teddy Bear will have sufficient funds to cover its expenses and initiate exploration for new mining opportunities.

Key Takeaways:

  • Teddy Bear Valley Mines has secured a $2 million private placement through a 7-year convertible debenture with a 3% coupon and a conversion price of $2.60 per share.
  • The company has also entered into a $3.39 million credit facility with a Toronto-based merchant bank, consisting of $2 million secured and $1.39 million unsecured loans.
  • The credit facility will have interest rates of 7% and 9% above bankers acceptance rates for secured and unsecured loans, respectively.
  • The loans will be repayable by August 1, 1998.
  • The Holloway Joint Venture, in which Teddy Bear owns 15.35%, is expected to produce approximately 100,000 ounces of gold per year, starting in about 1 year.
  • The company's available funds not required for mine construction and debt repayment will be used for exploration property acquisition and general working capital purposes.
  • Teddy Bear's shares are quoted and traded on the Canadian Dealing Network under the symbol TDBV.

Statistics:

  • $2 million: amount raised through private placement of 7-year convertible debentures
  • $3.39 million: total credit facility provided by the merchant bank
  • $2 million: secured loan amount
  • $1.39 million: unsecured loan amount
  • 7%: interest rate on secured loans
  • 9%: interest rate on unsecured loans
  • August 1, 1998: repayment deadline for credit facility loans
  • 100,000 ounces: expected annual gold production from the Holloway Joint Venture
  • 1 year: estimated time for Holloway mine to start production
  • 84.65%: Hemlo Gold's ownership stake in the Holloway Joint Venture
  • 15.35%: Teddy Bear's ownership stake in the Holloway Joint Venture
  • $1 million: amount available for exploration property acquisition and general working capital purposes

Sources:

  • BUSINESS WIRE, June 7, 1995
  • Teddy Bear Valley Mines, Ltd. press release, June 7, 1995

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