TSX-listed platinum explorer Platinum Group Metals (PTM) announced that it has entered into a credit agreement with a syndicate of lenders led by Sprott Resource Lending Partnership for a senior secured loan facility of up to US$40-million.

PTM will use the proceeds of the facility for the development and operation of its 82.9%-owned Western Bushveld Joint Venture (WBJV) Project 1 Platinum Mine, or Project 1, in the North West, and for general working capital purposes. The facility matures on December 31, 2017.

PTM CEO Michael Jones commented: “We are pleased to have this facility executed as another significant milestone towards production planned in the fourth quarter of 2015”.

The advance of funds under the facility by the lenders is subject to certain terms and conditions set out in the credit agreement. This includes satisfactory due diligence and the receipt of all applicable approvals, including regulatory, Waterberg partner and South African Reserve Bank, as well as other approvals.

The facility will be for a maximum principal amount of $40-million at an interest rate of LIBOR plus 8.50%, compounded and payable monthly.

PTM will be obligated to make certain payments to the lenders.

This includes either a bonus payment made concurrently with execution and delivery of the credit agreement in the amount of $1 500 000, being 3.75% of the principal amount of the facility. This is payable in 2 830 188 common shares of the company issued to the lenders at a deemed price per share equal to US$0.53 per common share of the company.

Or PTM will be obligated a draw down payment to the lenders equal to 2% of the amount being drawn down under the facility. This is payable in common shares issued at a deemed price equal to the volume weighted average trading price (VWAP) of the common shares on the TSX for the ten trading days immediately prior to the draw down request or such other VWAP as required by the TSX.

Further, PTM may be obligated to pay a structuring fee comprised of a cash payment of $100 000 paid concurrently with the execution and delivery of the term sheet for the facility.

Lastly, PTM may be obligated to pay a standby fee payable monthly until December 31, 2015 in cash equal to 4% per annum of the un-advanced principal amount of the facility.

The facility is planned to be available at the delivery and sale of first commercial concentrate from the WBJV Project 1, which is planned for fourth quarter 2015.

Project 1 is currently 70% complete.


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