Yellowhead Mining seeks loan for Harper Creek project

Both the loan and the rights offering are subject to legal and regulatory approval.

Yellowhead Mining Inc. recently announced that its board of directors has approved a loan of $500,000 from Matco Capital Ltd.

Matco holds about 36 per cent of Yellowhead’s shares and is wholly owned by Ronald Mathison of Calgary, a director of the company.

The loan has an interest rate of 10 per cent per annum and will mature on Dec. 31, 2015.

Matco previously owned the Weyerhaeuser property in Vavenby that is presently owned by Yellowhead.

Yellowhead also intends to undertake a rights offering to shareholders for the purchase of common shares of the company. Proceeds of the rights offering will be used to repay the loan, to provide working capital for the company, and to advance the environmental assessment permitting for the Harper Creek project.

Under the rights offering, rights holders will be able to subscribe for more than their proportionate share of common shares, should not all rights holders take up their pro rata share.

Matco has committed to subscribing for its proportionate share of common shares under the rights offering.

Both the loan and the rights offering are subject to legal and regulatory approval.

Harper Creek is a proposed 70,000 tonnesper- day open pit copper mine with a 28-year mine life, located about 10 km southwest of Vavenby.

Harper Creek would have a four-year development period, with the initial two years focused on environmental and construction permitting, and the second two years dedicated to construction.

When developed, Harper Creek would provide up to 600 jobs during construction and up to 450 permanent jobs during operations.