Jan 6 2011
Tirex Resources Ltd. (TSX VENTURE:TXX) has announced that the company has completed an agreement dated 30 December 2010 with the European Bank for Reconstruction and Development through which an additional EUR 1,500,000 of funding is available to Tirex for the advancement of the Mirdita District.
The new funding agreement comes during a time of substantial progress at Mirdita. On December 13, 2010, Tirex announced results from recent drilling which included a thick intercept of robust mineralization assaying 19.3m (63.3 ft) of 3.66% Copper, 1.13% Zinc and 1.2g/t Gold including 6.7m (22.0 ft) of 7.38% Copper, 1.77% Zinc and 1.6g/t Gold at South Gurthi No. 2. Tirex is expecting assays from several more holes drilled during the last quarter of 2010.
Additionally, mineral resource estimates based on Tirex definition drilling to date for Koshaj, South Gurthi No. 1, Letitna and South Gurthi No. 2 zones are now being calculated by SRK Consulting (U.K.) Ltd. Tirex plans to conduct a Preliminary Economic Assessment (PEA) of Koshaj, South Gurthi No. 1, Letitna and South Gurthi No. 2. The PEA will start immediately upon completion of resource calculations for the deposits, considering potential production scenarios. There are 17 known historical deposits on Tirex's property (9 of which were formerly in production). Koshaj, South Gurthi No.1, Letitna and South Gurthi No. 2 are the first four historical deposits that have been drill tested by Tirex. Drilling of other historical deposits at Mirdita will occur in 2011, targeting expansion of certain deposits on strike and at depth. Most of the deposit areas have never been tested with large scale, systematic and modern exploration.
The new EBRD facility totals EUR 1,500,000 (approximately CAD $2,000,000). The funding is via a 25% expansion of the current Tirex-EBRD convertible debenture facility with some additional terms.
Funds will bear interest at EURIBOR plus 1.5% when drawn. The new funds will be advanced under the terms of the facility for a five year term, convertible in the first two years at the market price at closing of the common shares of Tirex on the TSX Venture Exchange as of the day immediately prior to the date of the loan agreement, increasing 10% each year thereafter.
Interest may be compounded to the principal at Tirex's election to the date of maturity and is convertible at the EBRD's election. The funds will be available for Tirex to draw, subject to certain business terms, and will require Tirex raising $3 in equity for every $1 it draws from the facility. Funds can be drawn from the facility by Tirex in a maximum of two tranches of an aggregate amount of approximately CAD $2,000,000, convertible into 4,123,000 common shares of Tirex at the current strike price. This is additional to the previous funding provided by EBRD to Tirex through which the EBRD is able to convert a total of EUR 6,000,000 into common shares of Tirex. In total, once Tirex draws from the enhanced facility, EBRD will have the option to convert EUR 7,500,000 of convertible debt into common shares of Tirex.
As of the date of the agreement, the EBRD had the right to convert its outstanding convertible loans so as to hold 17,124,935 common shares of Tirex, representing approximately 23.3% of the issued and outstanding shares of Tirex based on there being 56,243,312 common shares currently in issue (assuming the conversion of the principal and interest but not including the corresponding or concurrent equity Tirex raises in the future as a condition to drawing on the facility). The EBRD has not converted any part of its loan facility into common shares, and does not currently hold any common shares in the capital of Tirex. As well, the loan agreement restricts the conversion into common shares of Tirex of any part of the loan facility that would result in EBRD becoming a new control person. The EBRD has advised Tirex that no other persons currently act jointly or in concert with the EBRD. This portion of the press release is being issued pursuant to National Instrument 62-103.
Source: Tirex Resources Ltd.