Anvil Range to fund stripping

Anvil Range Mining (ARO-T) has entered into an agreement that paves the way for a stripping program at its Grum deposit in the Yukon.

The company has reached an agreement-in-principle for a $15-Million secured loan to fund the program. The loan is being provided by its largest shareholder, Cominco (CLT-T), which holds a 27.7% interest in Anvil. The agreement has yet to be approved by regulators.

Anvil Range and its major shareholders are discussing the possibility of raising up to $5 million in additional funding on the same terms.

The Cominco loan would be fully secured by all of Anvil Range’s assets and carry an interest rate of 8.5%, with final repayment due by mid-October, 2001, or earlier, at the option of Cominco.

Cominco has agreed to release its security over current inventories and accounts receivable to support a working capital line of credit. In conjunction with the loan, Anvil Range would also issue 5 million warrants to Cominco exercisable at $3 per share.

Anvil Range President Patrick Mars says the stripping program is necessary to return the mine to full-scale production, which is expected to occur in the autumn.

The company says it will seek to raise between $20 and $30 million in new equity to fund additional capital equipment and provide working capital, either by way of a rights offering, public offering or private placement.