Cornerstone shareholders support Orla Mining through private placement of convertible notes
Torys acted as counsel to Fairfax with a team that included David Chaikof, Janan Paskaran and Jennifer Baugh (corporate/securities).
On November 18, 2024, Orla Mining Ltd. ("Orla") announced that it would issue an aggregate principal amount of US$200 million of senior unsecured convertible notes to cornerstone shareholders, led by Fairfax Financial Holdings Limited ("Fairfax"), Pierre Lassonde, and Trinity Capital Partners Corporation.
Under the terms of the commitment letter, the convertible notes have an interest rate of 4.5% per annum, payable in cash and a maturity date five years from the date of issuance. Each note may be converted in full or in part at any time prior to the maturity date, by the holder, into common shares of Orla at an initial conversion price of C$7.90 per share. After the 18-month anniversary of the issuance, Orla may redeem the convertible notes, provided that certain conditions are met.
Proceeds from the non-brokered private placement will be used to finance a portion of Orla’s transaction to expand into Canada through the acquisition of the Musselwhite Gold Mine in Ontario from Newmont Corporation for upfront cash consideration of US$810 million and gold-price linked contingent consideration of US$40 million.
Closing of the private placement was conditional on the successful closing of the acquisition, which was announced on March 3, 2025.
On closing of the acquisition, each holder of the convertible notes received a total of 23,392,397 common share purchase warrants, representing 0.66 common share purchase warrants for each share of Orla. The warrants have an exercise price of C$11.50 per share and expire on the fifth anniversary of the closing of the private placement.
Further information can be found on Canada Newswire’s website.
Orla acquires, develops, and operates mineral properties. It has two material gold projects: (1) Camino Rojo, located in Zacatecas State, Mexico; (2) Musselwhite Mine in northwestern Ontario, Canada; and (3) South Railroad, located in Nevada, United States.
Fairfax is a holding company whose corporate objective is to build long term shareholder value by achieving a high rate of compound growth in book value per share over the long term.