Beleaguered Liberty Mines (TSE:LBE) says it has agreed to a term sheet for a $500,000 bridge financing with Forbes & Manhattan, and appointed a new CEO and CFO in connection with the transaction in an effort to turnaround operations.
F&M, a private merchant bank focused on the resource industry, is made up of more than 30 companies that operate in over 20 countries, with six mines currently in operation and another six in the development stage. According to Liberty's statement on Monday, the bank has had success in turning around struggling companies to create "leading mid-cap mining companies".
In the first step of the turnaround, Liberty, which owns the only nickel concentrator in the Shaw Dome area near Timmins, Ontario, has appointed Pat Gleeson as the company's new president and chief executive officer. He is currently the senior legal advisor to F&M, and has been involved in the financing and development of a number of the world's leading mining companies, according to the release.
Meanwhile, Deborah Battiston, a CFO for a number of public mining companies, has been appointed chief financial officer for Liberty.
Both Gleeson and Battiston have been tasked with addressing Liberty's current financial challenges, and with restructuring the company. In the last five years, the company's stock has lost almost 100 per cent of its value, currently trading at 2 cents.
"Liberty Mines is in a similar position to that of Avion Gold, Belo Sun Mining and Sulliden Gold when F&M became involved with those companies," said Gleeson. "We look forward to working with Jilin Jien and the Liberty board and stakeholders to make Liberty Mines the next turnaround success."
Under the terms of the bridge loan, amounts drawn will accrue interest at a rate of 10 per cent per year, payable quarterly in advance.
Aside from the company's nickel concentrator, Liberty also owns two former-producing nickel mines and a land package near Timmins.