July 24, 2009 North American Tungsten Announces a CAD$6,000,000 Private Placement and Renewal and Increase in its Credit Facilities
North American Tungsten Corporation Ltd. (the "Company") is pleased to announce that it has negotiated a Private Placement of 40,000,000 common shares at a price of CAD$0.15 per share with insiders and private investors for proceeds of CAD$6,000,000, subject to regulatory approval. The proceeds of the private placement will be used for repayment of the US$3,000,000 convertible debenture and the balance for working capital. The Private Placement is subject to regulatory approval.
The Company further announces the renewal and increase to its credit facilities with HSBC ("Bank"). The completed credit facility renewals and increases include;
An increase in the operating loan to CAD$6,000,000 as supported by the Accounts Receivable Insurance and Foreign Inventory Guarantee Program of Export Development Canada ("EDC"). The operating loan carries an interest rate of bank prime + 2%;
Renewal of a $230,677 demand non-revolving equipment loan; carrying interest at bank prime + 2.25% per and as guaranteed by EDC under the Exporter Guarantee Program;
Renewal of a $198,129 demand non-revolving equipment loan carrying interest at bank prime + 1.75% and secured by a chattel mortgage creating a first fixed and specific change and security interest on the equipment;
New $500,000 demand non-revolving equipment loan (currently not accessed) carrying interest at bank prime + 1.75% and secured by a first fixed and specific charge and security interest over the equipment at the time of such acquisition;
Increase and renewal of an electronic funds transfer line of up to CAD$750,000.
The credit facilities are further secured by:
A general security agreement, creating a first fixed charge and security interest over all present and after acquired personal property and a floating charge over land and registered under a PPSA; first ranking general assignment of book debts creating a first priority assignment of all the Company; first ranking security under Section 427 of the Bank Act (Canada) including all supporting and ancillary forms creating a first priority charge on the Company's inventory; a Trade Finance Agreement; security over cash, credit balances and deposit instruments in the amount of CAD$1,000,000; and assignment or endorsement by the Company of all risk insurance on all of the real and personal property of the Company, including without limitation, lands, buildings, equipment and inventory owned by the Company, such policy to include lost profit and pubic liability insurance.
The credit facilities are subject to periodic review by the Bank no later than January 31, 2010.
An amendment to the subordination clause in the Reclamation Security Agreement ("RSA") between the Department of Indian Affairs and Northern Development ("DIAND") and the Company dated May 31, 2005, was received. The RSA defines the form and terms of the security deposit required to be posted pursuant to the Company's Water License. The amendment subordinates the security interest granted to DIAND pursuant to the RSA to the Bank in and to the present and after acquired assets of the Company to a maximum principal amount of CAD$6,000,000. Any amounts owing under the RSA are secured by a General Security Agreement over the assets of the Company.
ABOUT NORTH AMERICAN TUNGSTEN CORPORATION LTD.
The Company is a publicly listed Tier 1 Junior Resource Company engaged primarily in the operation, development, and acquisition of tungsten and other related mineral properties in Canada. The Company's 100% owned CanTung Mine and MacTung development project make it one of the few tungsten producers with both a producing mine and strategic development asset in the western world. MacTung is one of the world's largest known undeveloped high grade tungsten-skarn deposits.
ON BEHALF OF THE BOARD OF DIRECTORS
"Stephen Leahy"
Stephen M. Leahy
Chairman & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Cautionary Note: The Company relies upon litigation protection for "forward-looking" statements.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.
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