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Last updated on April 23, 2014 at 16:13 EDT

Marret Resource Corp. announces participation in Cline Mining restructuring

January 16, 2013

Trading Symbol: MAR

TORONTO, Jan. 16, 2013 /CNW/ – Marret Resource Corp. (TSX: MAR) (the
“Company”) is pleased to announce that it is participating in the
financial restructuring of Cline Mining Corporation (“Cline”) (TSX:
CMK) as announced by Cline on December 27, 2012 (the “Restructuring
Announcement”). On January 11, 2013, as part of a bridge financing to
allow for a comprehensive recapitalization of its balance sheet, Cline
issued US$7,000,000 of 10% senior secured bonds (the “Bonds), to be
added to the US$50,000,000 of Bonds already outstanding.

The Company held US$6,710,000 of the Bonds prior to the additional issue
of Bonds on January 11, 2013. As set out in the Restructuring
Announcement, Marret Asset Management Inc. (“Marret”), on behalf of
Cline’s bondholders, including the Company, agreed to provide
additional funding to Cline and to participate in the recapitalization
of Cline under a plan proposed by Marret (the “Marret Plan”). The
following sets out the Company’s participation in the proposed Cline
restructuring and the Marret Plan:

        --  The Company has received a forbearance and restructuring fee in
            the amount of US$335,000, which has been satisfied by Cline
            issuing additional Bonds;

        --  The Company purchased US$2,000,000 of additional Bonds (the
            "New Bonds") on January 11, 2013; the Company has agreed to
            purchase an additional US$1,000,000 in Bonds subject to Cline
            meeting various conditions;

        --  The Company has received a cash commitment fee in the amount of
            US$100,000 in respect of the purchase of the New Bonds;

        --  As an additional commitment fee for the purchase of the New
            Bonds, the Company received 400,000 new warrants from Cline,
            which are exercisable at a price of CDN$0.09 per common share
            and expire on January 11, 2016;

        --  The exercise price on Cline's existing warrants held by the
            Company was reduced to CDN$0.09 from CDN$1.15;

        --  In exchange for participating in a standby underwriting
            commitment (the "Standby Commitment") for a CDN$35,000,000
            rights offering to current common shareholders of Cline at a
            price of CDN$0.0205 per share (the "Rights Offering Price"),
            the Company has received a commitment fee of US$642,000, which
            was satisfied by the issuance of Bonds. The Company will
            exchange such Bonds for common shares of Cline at the Rights
            Offering Price, should the Marret Plan be implemented;

        --  The Standby Commitment may require the Company to subscribe for
            up to CDN$6,400,000 worth of common shares of Cline at the
            Rights Offering Price; and

        --  Under the Marret Plan, up to 40% of the Bonds held by the
            Company will be exchanged for common shares of Cline at an
            effective exchange price of approximately US$0.012 per share.

The Marret Plan will proceed unless, by April 30, 2013, Cline implements
a transaction which results in any of (i) a takeover bid of, or other
business combination with, Cline in which any person or group of
persons acting in concert acquires 50% or more of the equity securities
of Cline, (ii) the sale of all or substantially all of the assets or
business of Cline and its subsidiaries, or (iii) a recapitalization of
Cline, subject to certain conditions including that as a result of such
recapitalization Cline receives at least CDN$35,000,000 of gross cash
proceeds from the issuance of equity securities or, as a result of such
sale, Cline receives sufficient net proceeds to repay all amounts
(including interest, premium, principal and other fees) owing on or
under the Bonds and the other financing documents.

A detailed description of the Marret Plan and timing is set out in the
Restructuring Announcement.

On the completion of the purchase of the New Bonds noted above,
including the receipt of the various fees paid to the Company in Bonds,
the Company’s exposure to Cline will increase from approximately 6% to
8.7% of the net asset value of the Company (“NAV”). Assuming the
completion of the Marret Plan, the Company’s exposure to Cline will
increase from an estimated 14% to 18% of NAV, depending on the amount
taken up by the Company under the Standby Commitment and based on the
current NAV.

The Company has adopted an investment restriction which provides that
the net amount invested by the Company in the securities of any one
issuer at the time of investment may not exceed 10% of NAV (the “10
Percent Investment Restriction”). To allow the Company to participate
in the proposed Cline restructuring and the Marret Plan as outlined
above, the non-Marret members of the board of directors of the Company
have waived the application of the 10 Percent Investment Restriction in
respect of the Company’s participation in the proposed Cline
restructuring.

About Cline
Cline has metallurgical coal property interests in British Columbia and
in Colorado, U.S.A. with NI 43-101 independent Technical Reports. Cline
is focused on the exploration and development of metallurgical steel
making coals in Canada and the U.S., and on its iron ore property in
Madagascar and its Cline Lake gold property in northern Ontario,
Canada.

About Marret Resource Corp.
The Company is focused on natural resource lending. The Company’s
business is primarily directed to investing in public and private debt
securities of and making term loans (including bridge and mezzanine
debt) to issuers in a broad range of natural resource sectors,
including energy, base and precious metals and other commodities, and
issuers involved in exploration and development, and may also include
financing other resource related businesses and investing in public and
private equity and quasi-equity securities. The Company seeks to
generate income mainly from its lending activities, while taking
advantage of additional upside through equity participation in the
companies which it finances. Marret Asset Management Inc. is
responsible for implementing Company’s investment strategy and managing
its investment portfolio.

About Marret Asset Management Inc.
Marret Asset Management Inc. is an employee owned credit fixed income
manager based in Toronto. Marret’s experienced team of investment
professionals led by Barry Allan specialize exclusively in fixed income
and, particularly, in high yield debt strategies.


Forward-Looking Information
This news release includes certain information that may constitute
“forward-looking information” under applicable Canadian securities
legislation. Forward-looking information includes, but is not limited
to, the anticipated completion of the Cline restructuring and the
Marret Plan. Forward-looking information is necessarily based upon a
number of assumptions that, while considered reasonable, are subject to
known and unknown risks, uncertainties, and other factors which may
cause the actual results and future events to differ materially from
those expressed or implied by such forward-looking information. Such
risks include, but are not limited to, market conditions and the other
risks identified in the Company’s annual information form under the
heading “Risk Factors”. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance on
forward-looking information. All forward-looking information contained
in this press release is given as of the date hereof and is based upon
the opinions and estimates of management and information available to
management as at the date hereof. The Company disclaims any intention
or obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
except as required by law.

SOURCE Marret Resource Corp.


Source: PR Newswire