Wits Basin Announces $6,000,000 Stand-by Letter of Intent; Wits Basin Signs LOI with Definitive Documents to Be Complete within 15 Business Days
MINNEAPOLIS--(BUSINESS WIRE)--Feb. 8, 2005--Wits Basin Precious Minerals Inc. "Wits Basin" (WITM - news) is pleased to announce it has entered into a letter of intent to obtain $6,000,000 in senior debt financing from Charter Capital Resources, Inc. The Company intends that it will use the proceeds to retire all outstanding senior secured convertible debt, pay the acquisition purchase price of Bates-Hunter Gold mine and complete the rehabilitation of the permitted 100-ton per day Golden Gilpin production facility. All permits are current and the Company is under way with plans to begin the first phase required to dewater the Bates-Hunter Gold mine.
"This is a breakthrough financing allowing the Company the ability to achieve revenue without the need for additional equity financing," said Vance White, CEO of Wits Basin. "By proving up resources in the Phase 1 and 2 of the current rehabilitation program, the Company will be able to access traditional capital markets using debt instead of equity. Besides the possibility of building this mine to cash flow with these debt proceeds, we also intend to retire the Company's secured convertible securities. Our existing shareholders should be rewarded without the need to sell additional equity for these next valuable steps. We are on target with our next phase of this mine and are very pleased to date."
About Wits Basin Precious Minerals Inc.
Wits Basin is a minerals exploration company currently holding interests in four gold and base metal exploration projects. Wits Basin's common stock trades on the Over-the-Counter Bulletin Board under the symbol "WITM." Wits Basin is headquartered in Minneapolis, MN.
Forward-Looking Statements and Risk Factors
Certain statements contained in this press release that are forward-looking in nature are based on the current beliefs and assumptions of our management. When used in this press release, the words "may," "could," "should," "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," and similar expressions and their variants may be used to identify forward-looking statements. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes.
The exploration for and development of mineral deposits involves significant financial risks, which even experience and knowledge may not eliminate, regardless of the amount of careful evaluation applied to a process. While the discovery of a mineral deposit may result in substantial rewards, few properties are ultimately developed into producing mines. Moreover, we cannot make any estimates regarding probable reserves and mineral resources in connection with any of our projects and any estimates relating to possible reserves are subject to significant risks. Therefore, no assurance can be given that any size of reserves or grades of reserves will be realized. If a discovery is made, the mineral deposit discovered, assuming recoverable, may differ from the reserves and mineral resources already discovered and recovered by others in the same region of the planned areas of exploration.
The cost of exploration and exploitation can be extensive and there is no assurance that we will have the resources necessary or the financing available to pursue projects we currently hold interests in or to acquire interests in other mineral exploration projects that may become available. The risks are numerous and detailed information regarding these risks may be found in filings made by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and reports on Form 8-K.
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