Wayside Gets US$10M to Take Cariboo Gold Projects to the Next Level

Vancouver — After an almost 3-week trading halt, International Wayside Gold Mines (WGM-V, IWGMF-O) has announced the arrangement of a US$10-million loan facility from a private European-based investment firm.

Karver Capital Holdings will participate in the brokered senior secured debt financing and advance Wayside an immediate US$3.77-million bridge loan.

The loan facility, which will mature on June 29, 2007, is to be secured against company assets and will incur annual interest of 10% accrued and calculated monthly.

Additionally, lenders will be granted bonus warrants equivalent to 33.3% of the amounts advanced under the loan. Bonus warrants will be exercisable at 30 apiece for two years. About 12.88 million of the bonus warrants could be issued under the loan agreement.

Pending regulatory and shareholder approval, lenders will be able to convert every 25-value of loan notes into Wayside units consisting of a common share and a half-warrant. Full warrants will be exercisable on the same terms as the bonus warrants. With all outstanding notes converted upon maturity, about 48.7 million shares and 24.3 million warrants would be issued.

If all warrants were exercised upon conversion, the lenders would hold about 63% of the company’s outstanding shares.

Wayside has advanced $3.5 million of the funds to settle the final amount owing to Mosquito Consolidated Gold Mines (MSQ-V, MQCMF-O) under an option agreement to acquire 50% of the Cariboo gold quartz property (the remainder can be acquired by completing a positive bankable feasibility study) and 100% of the Island Mountain-Mosquito Gold projects located in the Wells-Barkerville area of east-central British Columbia. Mosquito Consolidated retains a 3% net smelter return royalty on the projects.

Funds will also be used to settle outstanding litigation and accounts payable, and clear liens on the properties.

Wayside proposes development of a 70,000-tonne-per-year open-pit operation at Bonanza Ledge and a 500,000-tonne-per-year open-pit mine within past workings at Cariboo, which operated from 1933-1967.

Bonanza Ledge hosts measured and indicated resources of 457,000 tonnes grading 5.8 grams gold per tonne, about 83,000 contained ounces gold. A further 207,000 inferred tonnes averaging 3.8 grams gold (about 25,000 contained ounces) was also reviewed.

The Cariboo gold quartz deposit contains an indicated resource of 2.8 million tonnes of 3.6 grams gold (312,000 contained ounces) plus 473,000 inferred tonnes at 3.7 grams gold (56,000 contained ounces).

Recorded production from the Cariboo gold camp is 3.8 million oz., about two-thirds from placer mining and one-third from hard-rock mining.

Shares of International Wayside surged after the financing announcement, gaining as much as 50% to hit 36 before settling around 28. The stock has a 52-week trading range of 20-59.