MONTREAL,
Oct. 15, 2013 /CNW Telbec/ -
Greg Struble, President and CEO of
Maudore Minerals Ltd. (MAO: TSX-Venture; MAOMF: US
OTC; M6L: Frankfurt Exchange) is pleased to report that
agreements have been signed for the consensual restructuring of
current debts owed to Cyrus Capital Partners ("Cyrus"), in its
capacity as a manager to FBC Holdings S.à.r.l ("FBC"), as well as
with the major unsecured creditors at both Maudore and its
operating subsidiary Aurbec Mines Inc. ("Aurbec"). This agreement
allows Maudore to focus on increasing production from the Sleeping
Giant Mine where underground diamond drilling has been proceeding
for the past 6 weeks.
The Maudore agreement covers $2.36 million of trade credit, of which
$300 thousand is to be repaid by
November 30, 2013 with the balance
due on October 30, 2014, with
provision for additional payments as set out below.
The Aurbec agreement covers $4.33 million of trade credit, of which
$562 thousand is to be repaid by
November 30, 2013 and a further
$562 thousand is to be repaid by
April 30, 2014 for a total reduction
of $1.12 million. The balance will be
due on October 31, 2014. The Aurbec
trade creditors will be granted a first ranking charge on Aurbec's
rights and claims in respect of its Vezza Project ("Vezza
Hypothec") to secure any outstanding balance until repaid.
In consideration for the Vezza Hypothec and the
payments by Aurbec, Entrepreneur Minier Promec Inc. ("Promec") has
agreed to discharge an existing Hypothec which it registered on
August 15, 2013 and has agreed to ask
the court that the Bankruptcy Petition filed on August 27, 2013 be withdrawn or dismissed.
Both agreements have been acknowledged by both
FBC and Cyrus.
Mr Struble is pleased to further advise that
Maudore has received, and its Board has approved, a Consensual
Restructuring Term Sheet Proposal ("Term Sheet") from Cyrus which
provides the following:
- Up to $6 million Liquidity
Facility which matures at the same time as the rest of the
Standstill Agreements
- One year of Interest Expense Deferral in the amount of
$2.984 million to be replaced by
$2.984 million of 5% Convertible
Debentures with a 3 year maturity
- $725 thousand commitment to
subscribe for their proportionate share of a $4.72 million Rights Offering (the "Rights")
details of which are set out below
- The existing Interest Escrow Account will be released and the
net proceeds applied to reduce the current term loan to
$19.2 million
The Board of Directors of Maudore have received
an opinion from Clarus Securities Inc. regarding the terms and
conditions of the Consensual Restructuring Term Sheet Proposal
stating that it is fair to the Company, from a financial point of
view.
Finally, Mr Struble hereby announces that
Maudore intends to file a prospectus for an offering of rights (the
"Rights"), to all shareholders as at a date to be determined. Each
Right will entitle the holder to purchase one share for each share
held at a price per share of $0.10.
Based on the current shares outstanding, this would result in total
proceeds of $4.72 million, if fully
subscribed. This will be subject to approval by the TSX.V and other
appropriate regulators.
As noted above, Cyrus has agreed to subscribe
for all of their shares to a total of $725
thousand as part of its overall Term Sheet proposal. In
addition, certain members of senior management have agreed to
subscribe for all of their rights plus such additional Rights that
may not be taken up to a total of $300
thousand. The proceeds of the offering will be added to
working capital to further improve the liquidity of the Company. To
the extent that the total funds raised exceed $2 million, the trade creditors will be entitled
to share in 50% of the excess amounts pursuant to the terms of
their respective Standstill Agreements.
"We are naturally very pleased that we have been
able to put this Consensual Restructuring in place," Mr Struble
stated. "It will allow us to focus all of our attention on
developing the tremendous potential that we see at Sleeping Giant
and increasing production."
Maudore's Chairman, Kevin Tomlinson, noted: "Despite the obvious
distractions caused by the recent restructuring challenges,
management has worked diligently to successfully restart the mining
operations at Sleeping Giant. The goal for us now is to define
further high-grade resources at Sleeping Giant where historically
the grades have been in the 9-13 g/t Au range with production
levels circa 50 thousand oz/a."
About Maudore Minerals Ltd.
Maudore is a Quebec-based junior gold company in
production, with mining and milling operations as well as more than
22 exploration projects. Five of these projects are at an advanced
stage toward development with reported current and historical
resources and mining. Currently, gold production is ramping up at
Sleeping Giant. The Company's projects span some 120 km, east-west,
of the underexplored Northern Volcanic Zone of the Abitibi
Greenstone Belt and cover a total area of 1,570 km² with the
Sleeping Giant Processing Facility within trucking distance of key
development projects.
Cautionary Statement Regarding
Forward-Looking Statements
This release and other documents filed by the
Company contain forward-looking statements. All statements that are
not clearly historical in nature or that necessarily depend on
future events are forward-looking, and the words "intend",
"anticipate", "believe", "expect", "estimate", "plan" and similar
expressions are generally intended to identify forward-looking
statements. These forward-looking statements include, without
limitation, performance and achievements of the Company, business
and financing plans, business trends and future operating revenues.
These statements are inherently uncertain and actual achievements
of the Company or other future events or conditions may differ
materially from those reflected in the forward-looking statements
due to a variety of risks, uncertainties and other factors,
including, without limitation, financial related risks, unstable
gold and metal prices, operational risks including those related to
title, significant uncertainty related to inferred mineral
resources, operational hazards, unexpected geological situations,
unfavourable mining conditions, changing regulations and
governmental policies, failure to obtain required permits and
approvals from government authorities, failure to obtain any
required approvals of the TSXV or from shareholders, failure to
obtain any required financing, failure to complete any of the
transactions described herein, increased competition from other
companies many of which have greater financial resources,
dependence on key personnel and environmental risks and the other
risks described in the Company's continuous disclosure
documents.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE Maudore Minerals Ltd.