Western GeoPower secures US$ 11 million loan facility

Well MC6 being flowtested at Meager Creek, BC/ Canada (source: Western GeoPower)

Alexander Richter 27 Jan 2009

Western GeoPower (TSX-V:WGP) announced that it has entered into a new US$11 million secured loan facility. Under the terms of the loan facility the initial tranche of US$7 million will be available to the company upon receipt of approval of the TSX Venture Exchange for the issuance of warrants and the payment of certain lending fees and expenses.

The second tranche of US$4 million will be available to the company when all conditions precedent to that tranche have been met, including the perfection of security, the discharge of any liens other than permitted liens, payment of certain lending fees and expenses, and that no event of default then exists. Interest will be payable at a rate of 1% for the first six months, 1.25% for the second six months and 1.5% thereafter.

As partial consideration for entering into the loan facility, the company has agreed to issue 43,495,543 warrants of the company, each warrant being exercisable for a period of 24 months at a price per warrant of CDN$0.14. The warrants and underlying shares will be subject to a hold period of four months following their issuance.

The proceeds of the loan may be used for drilling, project management, development cost, plant equipment, and up to US$300,000 in monthly working capital and general corporate purposes.

On November 7, 2008, the Company entered into an initial US$11 million secured loan facility, which has been fully drawn upon by the Company.

Source: Company announcement