STK.v...Why was Waterton willing to sign a forbearance agreement with STK.v, now 4 months ago, and not exercise its option to seize their property but the terms of the JV with GGN were so obviously lopsided? And they, seemingly, were not interested in negotiating before the July 31 deadline?
IMO they wanted Borealis sooner than later. No refinance or flexibility this time... they went for the throat. But I didn't think they were in the business of operating mines? Why would they want a marginal under-performing releah gold mine? IMO it's because it was not being run properly and to its full potential and they knew it. How they knew it and why it wasn't will be the interesting questions to answer.
Why else would they have been willing to invest an alleged $30M in this property? They were very careful, mind you, to ensure all monies went into infrastructure at the mine site and could not be used to drill or acquire additional property. Infrastructure they have since acquired in exchange for the debt they issued to establish it... Basically have paid $0/oz Au in the ground. How does that make you feel as a shareholder?
Waterton prides itself on the due diligence and first-class properties they choose to 'partner' with. Go read their website and the enormous inventory of projects they have evaluated. Borealis was one that passed all of their stringent tests. They wanted it bad. And here we are.
I still want to know why shareholders heard a lender proclaim his advances were continuously ignored by our CEO Jim O'Neil JR. in the second half of 2012. Also why our Board of Directors did not do more to prevent all of this from happening.
red911
Strike Minerals, Waterton sign forbearance agreement
2013-04-30 11:29 NT - News Release
Mr. Kerry Smith reports
STRIKE MINERALS ANNOUNCES ENTERING INTO FORBEARANCE AGREEMENT AND STANDSTILL AGREEMENT
Strike Minerals Inc. has entered into a forbearance agreement with Waterton Global Value (Luxembourg) SARL, under which Waterton has agreed to forbear from exercising its rights and remedies under the senior secured gold stream credit agreement dated Feb. 21, 2012, as amended by a letter agreement dated Feb. 21, 2013, security that Strike has provided in favour of Waterton to secure the company's obligations arising under the credit agreement, the Personal Property Security Act and other applicable law, until the earlier of (i) May 22, 2013; and (ii) the occurrence of an intervening event (as hereinafter defined). The full amount of the facility was $3.5-million. As of close of business on April 4, 2013, the outstanding indebtedness was approximately $2.9-million plus accrued interest, costs and fees.
Pursuant to the terms of the forbearance agreement, Strike is obliged to seek an offer of financing from a third party lender, pursuant to which a new lender shall advance sufficient funds to the company on or before the expiration of the forbearance period to permanently repay or cancel the facility.
The forbearance agreement shall terminate upon the happening of any of a number of intervening events, which include the failure of Strike to deliver a binding commitment letter (subject to usual due diligence conditions), setting out the terms of the refinancing by April 22, 2013. Strike has not yet delivered such commitment letter. Despite the occurrence of this intervening event, Waterton has not, to date, exercised its rights under the forbearance agreement (while reserving all of its rights to do so) and continues to work closely with Strike in its effort to secure financing and complete the refinancing. The company is currently engaged in negotiations with prospective investors and lenders in order to secure the refinancing and to come to a settlement of this matter.
In addition and in connection with execution of the forbearance agreement, Strike has entered into a standstill agreement with Waterton and 161229 Canada Inc. carrying on business as Whelan Mining Contractors. Pursuant to the standstill agreement, Whelan has agreed not to take any action against the company, Waterton or any other party in respect of the services, including all claims and allegations Whelan has raised in the lien action (see press release dated March 28, 2013). Unless otherwise agreed upon by the parties in writing, the termination date of the standstill agreement will be the earlier of: (a) May 22, 2013; or (b) the automatic termination of the standstill period if the company (i) takes any action or commences any proceeding, or any action or proceeding is taken or commenced by another person or persons against the company, relating to the reorganization, readjustment, compromise, enforcement or settlement of the debts owed by Strike to its creditors, including, without limitation, the filing of a notice of intention to make a proposal under the Bankruptcy and Insolvency Act (BIA), the making of an order under the Companies' Creditors Arrangement Act, the filing of an application for a bankruptcy order or receivership order against the company pursuant to the provisions of the BIA, or the commencement of any similar action or proceeding; (ii) Waterton takes any actions against the company pursuant to the credit agreement or otherwise; or (c) Strike informs Waterton and Whelan that the refinancing is not proceeding.
We seek Safe Harbor.