Wayside gets US$10-million loan facility

Vancouver – After an almost three-week trading halt, International Wayside Gold Mines (WGM-V, IWGMF-O) announced arrangement of a US$10-million loan facility from a private European-based investment firm.

Karver Capital Holdings will participate in the brokered senior secured debt financing and advance Wayside an immediate US$3.77-million bridge loan.

The loan facility, which will mature on June 29, 2007, is to be secured against company assets and will incur annual interest of 10% accrued and calculated monthly.

Additionally, lenders will be granted bonus warrants equivalent to 33.3% of the amounts advanced under the loan. Bonus warrants will be exercisable at 30 apiece for two years. About 12.88 million of the bonus warrants could be issued under the loan agreement.

Pending regulatory and shareholder approval, lenders will be able to convert every 25-value of loan notes into Wayside units consisting of a common share and a half-warrant. Full warrants will be exercisable on the same terms as the bonus warrants. With all outstanding notes converted upon maturity, about 48.67 million shares and 24.33 million warrants would be issued.

If all warrants were exercised upon conversion, the lenders would hold about 63% of the company’s outstanding shares.

Wayside intends to use $3.5 million of the funds to settle the final amount owing to Mosquito Consolidated Gold Mines (MSQ-V, MQCMF-O) under an option agreement to acquire the Cariboo Gold Quartz property and Island Mountain-Mosquito Gold projects located in the Wells-Barkerville area of east-central British Columbia. Mosquito Consolidated retains a 3% net smelter return royalty on the projects.

Funds will also be used in settling outstanding litigation, clearing liens on the properties and to settle accounts payable.

Wayside proposes development of a 70,000-tonne-per-year open pit operation at Bonanza Ledge and a 500,000-tonne-per-year open pit mine within past workings at its Caribou Gold Quartz project, which operated from 1933-to-1967.

Bonanza Ledge hosts measured and indicated resources of 457,000 tonnes grading 5.8 grams gold per tonne, about 83,000 contained ozs. of gold. A further 207,000 inferred tonnes averaging 3.8 grams gold (about 25,000 contained ozs.) was also reviewed.

The Caribou Gold Quartz deposit contains an indicated resource of 2.8 million tonnes of 3.6 grams gold (312,000 contained ozs.) plus 473,000 inferred tonnes at 3.7 grams gold (56,000 contained ozs.).

Recorded production from the Caribou gold camp is 3.8 million ozs., about two-thirds from placer mining and one-third from hard-rock mining.