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Asset-Backed Commercial Paper Distribution Update
Asset-Backed Commercial Paper Distribution Update
Tulsequah Chief Mine Project Development Update
January 26, 2009 – Vancouver, British Columbia – Redcorp Ventures Ltd. (TSX:RDV) (“Redcorp” or the “Company”) and its wholly-owned subsidiary, Redfern Resources Ltd. (“Redfern”), are pleased to provide an update on their access to funds resulting from the restructuring of Canadian Asset-Backed Commercial Paper (ABCP) and an update of permit and construction activities at the Tulsequah Project.
ABCP Restructuring and HSBC Bank Credit Facility
Redcorp received notice from the Pan-Canadian Committee of the closing on January 21, 2009 of the restructuring and distribution plan for the new notes to replace the Company’s existing $91.4 million investment in ABCP assets which did not mature in August 2007 as originally intended. An advisory letter from the Company’s broker-dealer, HSBC Bank Canada, is expected shortly, indicating the type and quantum of new notes, and back-interest receivable related to the former notes. Such new notes will replace the prior notes as security for an updated loan agreement with HSBC Bank Canada. Under the updated agreement, the new notes will allow the Company to access a credit facility of $85 million, an increase of $21 million over the existing facility.
According to the Pan-Canadian Committee, noteholders will receive accrued interest payments in two tranches. The first tranche, which is anticipated shortly, will represent interest accrued on the underlying assets from August 2007 to August 31, 2008 less the majority of the restructuring costs. A second tranche will be issued for accrued interest from August 31, 2008 to January 21, 2009, less any residual restructuring fees. The date for issuance of the second tranche is not yet known, but is expected near-term.
Permitting and Construction ActivitiesAs announced on December 22, 2008, construction activities at the mine site were suspended on December 17 for the holiday break. This suspension has been extended through January to allow for the acquisition of key permits, advance of project execution planning, and detailed engineering and production of final construction drawings. This suspension was also necessitated due to uncertainties on the timing of the ABCP restructuring. Clarity on the ABCP restructuring is now in hand and progress is being made in the remaining areas as detailed below:
Air Cushion Barge (ACB) Construction
Construction of the ACB has continued in Portland, Oregon, with the exception of an unplanned two-week work stoppage due to severe winter weather and access problems for the shipyard. The ACB is nearing completion with all major structural activities due for completion at the beginning of February. Hydraulic piping and electrical wiring is also nearing completion as well as final mounting of all four engine/fan units and housings. Additional detail work is required during February to complete the fuel system piping and controls. A final launch execution plan is under evaluation. After the launch, basic commissioning tests will be run and any necessary adjustments completed at the shipyard before the vessel is transported to Juneau, Alaska. The ACB is scheduled to be transported from the shipyard to Juneau, Alaska in mid-March.
Engineering and Procurement
Redcorp is working closely with Wardrop Engineering Inc.’s project team to expedite finalization of detailed engineering and delivery of final drawings. Procurement is continuing in concert with engineering to ensure that there are no delays to the engineering schedule. The target date for substantial completion of the drawings is March 31, 2009.