GEORGE TOWN, Grand Cayman, Oct. 23 /CNW/ -- Endeavour Financial Corporation is pleased to announce that its wholly owned subsidiary, Endeavour Financial Luxembourg SARL ("Endeavour") has completed the previously announced private placement (see News Release, September 23, 2009) with Etruscan Resources Inc. to purchase 153,123,000 common shares at C$0.30 per share for a cost of US$43 million.
Prior to closing the private placement, Endeavour completed the previously announced transaction with Kirkland Intertrade Corp. and 2190776 Ontario Inc. to purchase 26,315,789 Etruscan common shares and 6,855,760 Etruscan share purchase warrants, entitling Endeavour to acquire 6,855,760 Etruscan common shares.
Endeavour's total investment of US$56 million results in the Corporation holding 179,438,789 common shares, representing 54% of the issued and outstanding common shares of Etruscan.
Endeavour's strategic investment facilitated the comprehensive restructuring of Etruscan's senior debt facility and related hedging, which was originally undertaken to finance the construction of the Youga Gold Project in Burkina Faso.
Endeavour has worked closely as the advisor to Etruscan in connection with the senior debt restructuring with its senior lenders, RMB Australia Holdings Ltd. and Macquarie Bank Limited (the "Senior Lenders"). The revised loan documentation includes the deferral of principal payments until December 31, 2010, the removal of the requirement for the Youga mine to pass a completion test, and a significant relaxation of financial and other covenants on the Etruscan group.
Of the proceeds, US$23 million was utilized to reduce the hedge position, resulting in less than 20% of the current life-of-mine production being hedged.
As part of the debt restructuring, the Senior Lenders requested the right to convert US$3 million of the US$33 million senior debt facility to common shares of Etruscan at the same price as the Endeavour Placement (C$0.30 per common share). On closing of the transaction, the Senior Lenders exercised this right.
In addition, Etruscan's unsecured convertible notes totaling US$10.5 million were settled with US$8.5 million being repaid from the Endeavour proceeds and the balance of US$2.0 million outstanding to Conus Partners Inc. and affiliates being converted into common shares at C$0.30 per share.
Four Endeavour nominees will join Etruscan's eight member board, being Neil Woodyer, Frank Giustra, Gordon Keep and David Street.
Neil Woodyer, Chief Executive Officer of Endeavour stated: "We are pleased with the financial restructuring which we have agreed with Etruscan management and the Senior Lenders and appreciate the ongoing support of the Senior Lenders. The private placement and associated financial restructuring have addressed Etruscan's financial needs, improved its operating cash flow and increased its leverage to higher gold prices. The restructuring will allow management to re-focus their efforts at the Youga mine on increasing production, reducing costs and extending the mine life. Etruscan management will be able to develop the advanced-stage Agbaou Gold Project, Ivory Coast (see Etruscan updated Feasibility Report, July 2009); and exploration activities will resume on the significant land packages in West Africa that Etruscan has spent many years acquiring".
Endeavour regards the Etruscan investment as the first of a series of strategic investments it intends to make in the junior gold sector as part of its gold focused investment strategy.
The securities were acquired by Endeavour for investment purposes. While the Corporation does not currently have any intention to acquire further securities of Etruscan, Endeavour may in the future acquire or dispose of securities of Etruscan through the market or otherwise as circumstances or market conditions warrant.
About Endeavour Financial Corporation
Endeavour is an independent merchant banking company focused on the global natural resources sector. The Corporation offers advisory services in project, corporate and debt capital markets; equity financings; mergers and acquisitions; and strategic business development. Endeavour also has a gold-focused investment strategy and seeks maximum returns by identifying, investing in and consolidating junior gold mining companies.
Endeavour Financial Corporation is listed on the Toronto Stock Exchange, symbol EDV. Warrants are listed on the Toronto Stock Exchange, symbol EDV.WT.A.
For additional information, please visit our corporate website, www.endeavourfinancial.com
On behalf of Endeavour Financial Corporation
Executive Vice President & Chief Financial Officer
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The foregoing information may contain forward-looking information relating to the future performance of Endeavour Financial Corporation. Forward-looking information, specifically, that concerning future performance, is subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Corporation's filings with the appropriate securities commissions.