New Release NOW WE"RE LENDING MONEY
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: BOLIVAR GOLDFIELDS LTD.
TSE SYMBOL: BVG
AND GRAN COLOMBIA RESOURCES INC.
TSE SYMBOL: GRM
JULY 4, 1997
Bolivar Goldfields Ltd. and Gran Colombia Resources Inc.
Jointly Announce that they have entered into an agreement
TORONTO, ONTARIO--Bolivar Goldfields Ltd. ("Bolivar") and Gran
Colombia Resources Inc. ("Gran Colombia") jointly announce that
they have entered into an agreement whereby Gran Colombia has
agreed to make available to Bolivar a bridge loan of up to
US$1,000,000. The loan is to be secured by a pledge of Bolivar's
shares in Gran Colombia, and will be repaid within one year from
the date of first drawdown.
Standard Bank of London ("Standard") has agreed with Bolivar to
underwrite a loan facility for the construction and development of
a mine at its Tomi concession in Bolivar State, Venezuela. The
Bank technical audit of the Tomi project feasibility study
engineering and reserves has been completed and Standard has
agreed to provide the loan facility subject to finalizing the
remaining due diligence and documentation. Finalizing the
financing still requires time and the incurring of expenses that
are out of the ordinary course of business, such as those related
to the financing itself, costs related to Phase 1 engineering
(which is now complete) and Bolivar obtaining the appropriate
environmental permits and the balance of funding for project
development. Bolivar does not have the cash resources to meet
these extraordinary expenses in addition to its usual requirements
for general working capital, prior to the completion of the Tomi
project financing. Accordingly, Bolivar has entered into an
agreement with Gran Colombia (of which Bolivar owns 10,175,000
shares, or approximately 28.8 percent of Gran Colombia's issued
and outstanding capital), whereby Gran Colombia agreed to make
available to Bolivar a credit facility, for the purpose of
assisting Bolivar in meeting its general working capital
requirements prior to completing the financing for the Tomi
project.
Under the terms of the facility, Gran Colombia will make available
to Bolivar up to US$1,000,000, to be drawn down in individual
tranches of US$100,000 or more. Advances made by Gran Colombia
will bear interest at a rate equal to US$ LIBOR plus 4 percent
from the date of the drawdown until repayment. Repayment is
required within 30 days of Bolivar receiving its first advance
pursuant to the financing of the Tomi project, and in any event
within one year from the date of the first drawdown.
Any advances made will be secured by a pledge of Gran Colombia's
shares held by Bolivar. The total value of shares pledged will be
maintained at twice the total of all outstanding advances under
the facility with the number of shares determined by the closing
market price of the shares at the end of each month.
Because Bolivar and Gran Colombia share some common directors, the
transaction was reviewed and approved by separate committees
comprised of the independent directors of each company. In
addition, the directors of each company received the advice of a
third party financial advisor as to the commercial reasonableness
of the terms of the loan.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Bolivar Goldfields Ltd./Gran Colombia Resources Inc.
Peter Volk
(416) 955-4554
(416) 955-1206 (FAX)
or
Bolivar Goldfields Ltd./Gran Colombia Resources Inc.
Mauro Coppola
(416) 955-4554
(416) 955-1206 (FAX)
NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED
HEREIN. |
