VANCOUVER, Dec. 8 /CNW/ - Copper Mesa Mining Corporation ("Copper Mesa" or the "Company") (TSX:CUX) announced that it has successfully raised additional working capital through the restructuring of the terms of an existing bridge loan agreement entered into on September 10, 2008.
Of the original loan facility in the amount of US$2.3 million, the Company drew down US$1.2 million and issued 1.3 million warrants. Under the amendment, the lenders made available to the Company a US$0.5 million facility (the "Loan") for immediate drawn down in replacement of the US$1.1 million facility which would have been available to the Company under the original facility only after the fulfillment of certain conditions. Today the Company drew down the full US$0.5 million Loan and, as a result, a total of US$1.7 million in loans are outstanding under the bridge loan agreement.
Under the terms of the Loan, the Company is issuing 5 warrants for each dollar of the Loan drawn down by the Company. Each warrant will be exercisable for a five year term from the date it is issued, and will be convertible for one common share of the Company at an exercise price per share of $0.03, which is equal to the volume-weighted average closing price per share on the TSX for the 5 trading days ended December 5, 2008. If the lenders exercise all 2.5 million warrants being issued in connection with the Loan, and the 1.3 million warrants issued on September 10, 2008, the Company would issue an aggregate of 3.8 million shares, representing approximately 3.7% of the current shares issued and outstanding.
The amendment to the bridge loan agreement is a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") because one of the lenders has recently become a related party for purposes of that instrument. The Company is relying upon exemptions from certain requirements under MI 61-101 which will be described in the material change report to be filed by the Company on SEDAR in connection with the amendment to the bridge loan agreement.
Copper Mesa Mining Corporation
Copper Mesa is a mineral exploration and development company focused on advancing into production its two key past-producing copper properties, the Zonia and Emerald Isle Mines, in Arizona. The Company is continuing to evaluate additional opportunities and properties of merit in the Americas.