TORONTO, March 3,
2023 /CNW/ - Magna Gold Corp. (TSXV: MGR) (OTCPINK:
MGLQF) ("Magna Gold", and together with its direct and indirect
subsidiaries, "Magna" or the "Company"), today announces that
Magna Gold has filed a Notice of
Intention to Make a Proposal (the "NOI") under the Bankruptcy
and Insolvency Act (Canada)
which will provide creditor protection while the Company seeks to
restructure its affairs. KSV Restructuring Inc. was appointed as
proposal trustee (in such capacity, the "Proposal Trustee") under
the NOI to monitor Magna Gold's
operations and restructuring. The effect of the NOI is an initial
and immediate stay of proceedings in favour of Magna Gold for 30 days, which stay can be
extended by court order. As noted, Magna
Gold is seeking to restructure; not liquidate. Information
and materials filed in connection with the NOI will be available on
the Proposal Trustee's website:
https://www.ksvadvisory.com/experience/case/magnagold.
In coordination with the NOI, Magna
Gold's indirect subsidiary, Molimentales del Noroeste S.A.
de C.V. ("Molimentales") filed an application for restructuring
("solicitud de concurso mercantil en fase de concurso") and
provisional creditor protection ("medidas cautelares") (the
"Insolvency Application") before the Second District Court for
Insolvency Matters located in Mexico
City, Mexico (Juzgado Segundo de Distrito en Materia de
Concursos Mercantiles con Residencia en la Ciudad de México y
Jurisdicción en toda la República Mexicana; the "Concurso
Court") under the Mercantile Insolvency Act ("Ley de Concursos
Mercantiles"). Molimentales is the owner and operator of the
Company's San Francisco Mine. The initial ruling in connection with
the Insolvency Application was issued by the Concurso Court on
March 3, 2023 and certain pre-emptive
protections were granted in favour of Molimentales including,
inter alia, a suspension of all enforcement proceedings
against the assets or rights of Molimentales.
The decision to seek creditor protection for Magna Gold and Molimentales was made after
careful consideration of the Company's cash position, scheduled
debt payments, forecast revenue and expenses and all available
alternatives. Following consultation with its legal and financial
advisors, the Board of Directors of Magna
Gold determined that it was in the best interests of
Magna Gold and Molimentales and
their stakeholders to seek to restructure their affairs under the
applicable creditor relief laws. The proceedings are intended to,
among other things, facilitate a restructuring of the Company's
balance sheet, the injection of additional capital, a sale of the
company or its assets, or any combination thereof. Importantly,
management of Magna Gold and
Molimentales remain responsible for the day-to-day operations,
under the general oversight of the Proposal Trustee and the
Concurso Court.
As a result of the foregoing, the TSX Venture Exchange (the
"TSXV") has advised Magna
Gold that the trading of Magna
Gold's common shares will be transferred to the NEX Board of
the TSXV effective at the opening of the market on March 8, 2023. The trading symbol will change
from MGR to MGR.H.
No directors of Magna Gold have
resigned and the board of directors continues to be comprised of
six directors.
About Magna Gold Corp.
Magna is a Mexico focused gold
and silver production company engaged in acquiring, exploring,
developing and operating quality precious metals properties in
Mexico. It is committed to
advancing its 100% owned flagship San Francisco Mine, its Margarita
Silver Project and other highly prospective mineral properties
located in Sonora and in
Chihuahua. The primary strength of the Company is the team of
highly experienced mining professionals with a proven track record
of developing properties in Mexico
from discovery to production. Magna employs community members and
services in its operations.
ON BEHALF OF THE BOARD OF DIRECTORS
Arturo Bonillas
President and CEO
Neither the 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.
Cautionary Statements
This news release includes certain "forward-looking
statements" which are not comprised of historical facts.
Forward-looking statements include estimates and statements that
describe the Company's future plans, objectives or goals, including
words to the effect that the Company or management expects a stated
condition or result to occur. Forward-looking statements may be
identified by such terms as "believes", "anticipates", "expects",
"estimates", "may", "could", "would", "will", or "plans". Since
forward-looking statements are based on assumptions and address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Although these statements are
based on information currently available to the Company, the
Company provides no assurance that actual results will meet
management's expectations. Risks, uncertainties and other factors
involved with forward-looking information could cause actual
events, results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Forward-looking information in this news release
includes, but is not limited to, the intention to restructure the
affairs of Magna Gold and
Molimentales, the Company's objectives, goals or future plans,
exploration results, shareholder value expectations, exploration
and mine development plans (including mine plan optimization and
value creating initiatives involving non-core assets), production
(including gold production expectations and guidance), processing
and mining expectations (including statements regarding reduction
and resumption of mining operations), cost and cash flow
expectations., and payables reduction. Factors that could cause
actual results to differ materially from such forward-looking
information include, but are not limited to, the inability of
Magna Gold and/or Molimentales to
restructure their affairs ,failure to identify mineral resources,
failure to convert estimated mineral resources to reserves, the
inability to complete a feasibility study which recommends a
production decision, the preliminary nature of metallurgical test
results, delays in obtaining or failures to obtain required
governmental, environmental or other project approvals, political
risks, uncertainties relating to the availability and costs of
financing needed in the future, changes in equity markets,
inflation, changes in exchange rates, fluctuations in commodity
prices, delays in the development of projects, capital, operating
and reclamation costs varying significantly from estimates and the
other risks involved in the mineral exploration and development
industry, risks related to the effects of COVID-19 on
the Company; and those risks set out in the Company's public
documents filed on SEDAR. Although the Company believes that the
assumptions and factors used in preparing the forward-looking
information in this news release are reasonable, undue reliance
should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that
such events will occur in the disclosed time frames or at all. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law.
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SOURCE Magna Gold Corp.