TORONTO – Stock in Cline Mining Corp. (TSX:CMK) was up more than 10 per cent in relatively heavy trading Monday, the same day it announced a US$25-million bond issue to expand its New Elk metallurgical coal mine in Colorado.
In late morning trading, Cline stock was up 11 cents or 10.48 per cent at C$1.16 on the Toronto Stock Exchange with more than 2.9 million shares traded. That was close to the issue’s usual daily average of just under 3.3 million.
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Cline said the bonds issued Monday will mature Feb. 27, 2014, and bear a coupon of 10 per cent a year.
The Toronto-based miner said the bond issue was in conjunction with a previously announced debt financing in which it entered into a trust indenture with Marret Asset Management Inc. and Computershare Trust Company of Canada as trustee for certain investment funds advised by Marret.
In consideration for the company being permitted to draw down on the commitment of the lenders to take up the bonds, Cline has issued 1.25 million common share purchase warrants to the lenders exercisable at a price of C$2.49 and expiring April 30, 2015.
“This bond issuance will assist Cline in meeting its ongoing targeted production rates and important expansions at the New Elk mine in addition to providing funds for capital improvements,” president and CEO Ken Bates said in a statement.
Meanwhile, the company said it intends on entering into a new warrant indenture with CIBC Mellon Trust Co. under which 10,000,000 common share purchase warrants will be issued and an existing warrant indenture will be terminated.
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