Company was not in compliance with its covenantsThe below is quoted from Sept 2022 quarterly financial filing. Apparently all $134.1M CDN borrowings have been defaulted on including Sprott financial loans. Recovery of losses in the CCAA environment is based on the nature of the loans - secure vs unsecure. Common shre holders are at the bottom of the ladder with preferred shre holders and bond holders being next.
On July 12, 2022, the Company entered into an agreement (the “Agreement”) with its lenders, whereby Sprott agreed to:
i) Provide to the Company an additional, secured, first-priority, non-revolving credit facility (“Additional Credit Facility”) up to a maximum principal amount of US$6,000; and
ii) Amend the principal repayment schedule in the existing Credit Facility, whereby the first four scheduled principal payments, each 2.5% of the total principal amount, originally scheduled for the last day of September 2022, December 2022, March 2023, and June 2023, respectively, have been deferred to August 2026.
The Additional Credit Facility matures on December 31, 2022 and accrues interest at a rate of 14% per annum. Drawdowns on the Additional Credit Facility are permitted for payments owing to Sprott, including interest, Gold Stream and PPA payments. As at September 30, 2022, the Company had drawn $6,448 on the Additional Credit Facility.
As a result of the amendment to the principal repayment schedule of the Credit Facility which was accounted for as a modification of debt under IFRS 9, the Company recognized a $5,528 loss to the Company’s statement of loss and comprehensive loss.
As at September 30, 2022, the Company was not in compliance with its covenants, and as such, has classified the entirety of its Credit Facility, Interest Rate Floor derivative and Production Payment Agreement, as current.