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Extract Capital leads $20 mln refinancing of Energold Drilling

Canadian specialty drilling company Energold Drilling Corp (TSV-V: EGD) has agreed to receive a $20 million secured convertible loan in a deal led by Extract Capital, a U.S. natural resources investment firm. Extract will account for $15 million of the loan, the rest of which will be provided by a syndicate of existing debenture holders, new investors and others. With the deal’s closing in March, Extract will be entitled to nominate one board member. Vancouver-based Energold, which serves the mining, energy, water, infrastructure and manufacturing sectors, said the proceeds will be used to repay its current loans and credit facilities.


Energold Drilling Group Announces Debt Refinancing of Convertible Debentures & Loans

Trading Symbol: “EGD: TSV.V”

VANCOUVER, Feb. 14, 2017 /CNW/ – Energold Drilling Corp. (“Energold” or “the Company”) is pleased to announce that it has entered into a binding term sheet with Extract Advisors LLC (“Extract”), a New York and Toronto-based natural resources investment fund manager, for a $20 million, secured convertible loan (“Convertible Loan”). Extract, through funds it manages, has agreed to finance $15 million principal amount of the Loan and the balance will be provided by a syndicate of lenders to include existing debenture holders, new investors and insiders of the Company, who have agreed to finance $2.25 million of the Loan.

Energold intends to use the proceeds to repay its current loans including $13.5 million of secured convertible debenture due July 2017, as well as credit facilities with Royal Bank and Export Development Canada.

The Loan will have a term of 60 months, provided that 75% of the outstanding principal amount will be repaid within thirty-six (36) months, will carry an interest rate of US LIBOR plus 750 basis points, increasing to LIBOR plus 1,100 basis points during the last 24 months of the term, and with LIBOR to have a floor of 200 basis points, payable monthly. The Convertible Loan will be convertible into common shares of the Company, in whole or in part, at the sole discretion of the lenders, at a conversion price of $0.85 per share. Conversion of the Loan into common shares, and the exercise of the warrants described below, will be subject to a restriction such that Extract’s holdings will not, at any time, exceed 15.0% of the outstanding voting shares of the Company.

Energold will also issue 4,000,000 warrants, with a term of 60 months, as part of the $20 million financing that will be distributed to all investors on a pro-rata basis. The warrants will be exercisable for one common share at an exercise price of $1.50. In addition, Energold will issue to certain funds managed by Extract, 100,000 warrants with a term of 36 months that will be exercisable for one common share at an exercise price equal to the Conversion Price under the Loan.

In connection with the financing, Extract will be entitled to nominate one member to the board of directors of the Company pursuant to the terms of nomination rights agreement with Energold and Extract will serve as the Agent for the lenders. Extract will be paid an arrangement fee equal to 3% of the amount of the loan financed by certain funds managed by Extract.

To secure the obligations of the Company under the Loan, Energold had agreed to provide perfected senior, first ranking security interest in all assets of the Company with the exception of those assets already in place to secure certain loans and lease commitments.

Closing of the financing is expected on or before March 31, 2017 and is subject to the satisfaction of customary commercial lending conditions precedent, receipt of required consents from and agreements with certain existing lenders to the Company, and the receipt of applicable regulatory approvals, including approval of the TSX Venture Exchange.

Energold Drilling Corp. is a leading global specialty drilling company that services the mining, energy, water, infrastructure and manufacturing sectors in approximately 25 countries. Specializing in a socially and environmentally sensitive approach to drilling, Energold provides a comprehensive range of drilling services from early stage exploration to mine site operations for all commodity sectors and has an established drill rig manufacturer, Dando Drilling International, based in the United Kingdom. Energold also holds 6.98 million shares of IMPACT Silver Corp., a silver producer in Mexico.

On behalf of the Directors of Energold Drilling Corp.,

“Frederick W. Davidson”
President, CEO

For further information: Steven Gold – Chief Financial Officer, (416) 275-4070 or via email at Or Jerry Huang – Manager, Corporate Development & Investor Relations, (604) 681-9501 or via email at, 1100 – 543 Granville St. Vancouver, BC V6C 1X8,, Telephone 604 681 9501, Facsimile 604 681 6813,

Photo courtesy of Energold Drilling Corp