Freegold
Financing Update
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January 14, 2009 (Vancouver, BC)
-- Freegold Ventures Limited (TSX: ITF, OTCBB:
FGOVF, Frankfurt: FR4) is pleased to provide an update on its efforts to
secure additional financing for the repayment of its US $4 million in
bridge loans, and to provide additional working capital for the Company.
Freegold has recently received terms from a private European lender for a
secured line of credit of up to US $10 million for a maximum maturity of 3
years. Terms under
this facility include interest that will be paid annually on each
anniversary of the closing, based on the average US Dollar 3-month Libor
rate during the period + 2% per annum. The facility is to be collateralized
by a first priority pledge of the shares in Freegold's wholly owned US
subsidiaries and a general security agreement against the personal property
of the Company (including a second charge against the processing and
private property assets currently collateralizing an equipment loan at
Golden Summit). Funds drawn under the line of credit may be repaid at any
time, and no upfront fees or conversion rights are being paid or granted to
the lender. Upon the Company receiving advances totaling a minimum of US
$7.5 million, the lender will receive 750,000 warrants to purchase Freegold
common shares for a period of two years from the date of grant at a price
of $0.30 per share. A finder's fee, payable in cash and equal to 4% of the
amounts drawn under the line of credit, will be paid to an arm's length
party in connection with this financing.
Funds drawn under this facility will be used to repay in full the Company's
US $4 million in bridge debt. Closing of this facility is expected to occur
within the next three weeks, and in consideration of this timing, the
bridge lenders have agreed to extend the maturity of their loans to
February 10, 2009. As consideration of this extension, the exercise price
of the 350,000 warrants each lender received at the time the bridge loans
were advanced will be reduced from $0.66 and $0.55 respectively to $0.30,
and the Company will issue each lender an additional 250,000 common shares.
Pursuant to the policies of the TSX, the re-priced warrants may not be
exercised for a period of ten business days. The other terms and conditions
of the bridge loans will remain unchanged.
Freegold also announces that Robert Jackson, President of Tiomin Resources
Inc., one of Freegold's bridge lenders, is also stepping down from the
board effective immediately. We would like to thank Robert for his service
to the Company and wish him the best in his future endeavours.
Commenting on the financing, Freegold President and CEO, Steve Manz, said
"We are very pleased to have been able to obtain terms for a facility
of this size and term during these difficult market conditions. We have
always been sensitive to the issue of equity dilution. Our last equity
financing closed in June 2007, and should we be successful in closing this
new line of credit, we would continue to avoid the issuance of a large
numbers of shares at low share prices to provide the Company with
additional working capital. Closing of this facility would allow full
repayment of the two bridge loans on a more favourable and longer term
basis, and the Company would remain well positioned to continue to add
value to its advanced Alaska and Idaho projects. Following completion of
the financing, work over the coming months would involve low cost analysis
and modeling of the extensive programs undertaken this year on our four
projects, after which we would evaluate the best manner to move the
projects forward and add to our overall gold resource base."
The transactions described herein are subject to regulatory approval.
About Freegold Ventures Limited
Freegold Ventures Limited is a North American exploration and development
company with a management team experienced in mine development and
production that has a proven track-record in transitioning exploration
companies into gold producers. The Company is currently exploring
advanced-stage gold projects in Idaho and Alaska. Freegold holds a 100%
lease interest in the Almaden gold project in southern Idaho, a 93%
interest in the Golden Summit gold project outside Fairbanks, Alaska, and
near the Fort Knox gold mine, a 100% interest in the Rob gold project near
the Pogo gold mine in the Goodpaster Mining District of Alaska, and has an
exploration agreement with option to lease the Vinasale gold project in
central Alaska.
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For further information:
Mark Feeney - Investor Relations
1.604.786.2587 mfeeney@freegoldventures.com
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Suite
507 - 1540 West 2nd Avenue, Vancouver, BC, Canada V6J 1H2
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www.freegoldventures.com
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DISCLAIMER
- This press release
contains "forward-looking information" within the meaning of
Canadian securities laws including, without limitation, statements and
information regarding the Company's exploration operations and financing
needs. Such forward-looking information reflects the current expectations
or beliefs of the Company. Forward-looking information is subject to a
number of risks, assumptions and uncertainties that may cause the actual
results of the Company to differ materially from those discussed herein,
including the possibility that future exploration results will not be
consistent with the Company's expectations, the uncertainties involved in
interpreting exploration results, other inherent risks in the mineral
exploration and development industry and the possibility that the loan
facilities will not be completed or completed on terms not currently
contemplated by the Company. Readers are cautioned not to place undue
reliance on forward-looking information because it is possible that
expectations, predictions, forecasts, projections and other form of
forward-looking information will not be achieved by the Company. A change
in any one of these factors could cause actual events or results to differ
materially from those projected in the forward-looking information.
Although the Company believes that the expectations reflected in such
forward-looking statements and information are reasonable, the Company can
give no assurance that such expectations will prove to be correct.
Forward-looking statements and information are based on current
expectations, estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially from
those anticipated by the Company and described in the forward-looking statements
or information. The forward-looking statements and information are based on
a number of assumptions which may prove to be incorrect. In addition to
other assumptions identified herein, the Company has made assumptions
regarding, among other things, the ability to conduct exploration
activities in a timely manner and in accordance with the Company's drilling
program, the availability and costs of financing, the degree of risk that
credit approvals may be delayed or withheld, and other risks and uncertainties
described elsewhere in this document or in the Company's other filings with
Canadian securities authorities. Such forward-looking information speaks
only as of the date on which it is made and, unless required by applicable
securities laws, the Company undertakes no obligation to update any
forward-looking information, whether as a result of new information, future
events or results or otherwise. CUSIP: 45953B107. This email should
not be construed as an offer to buy or sell securities of Freegold Ventures
Limited.
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