NR Baja Mining Signs Second Standstill Agreement With Lenders
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 7, 2012) - Baja Mining Corp. ("Baja") (TSX:BAJ)(OTCQX:BAJFF) today announced that the lenders to its 70% owned subsidiary, Minera y Metalúrgica del Boleo S.A. de C.V. ("MMB") have agreed to a new standstill agreement in relation to the Boleo project financing. The new standstill agreement expires September 15, 2012 and extends the standstill described in Baja's news release of June 20, 2012, which expired on August 1, 2012.
Under the new standstill agreement, MMB's lenders, without waiving any of the defaults or events of default currently outstanding or that may arise during the standstill period, agree until September 15, 2012 to refrain from exercising any rights and remedies under the Boleo project financing agreements with respect to certain defaults and events of default that are currently outstanding or that may arise during the standstill period.
The new standstill agreement requires an immediate advance of US$11.2 million to MMB by the Korean companies (the "Korean Consortium") which currently own the other 30% of MMB, which advance has been made. To remain in effect, the standstill requires the Korean Consortium to advance an additional US$18 million by August 9, 2012 and a further US$60.8 million by August 20, 2012. These advances will complete the Stage I financing agreed with the Korean Consortium described in Baja's news release of July 26, 2012.
If members of the Korean Consortium providing 60% of the Stage I funding decide not to make any further investment in the project and consequently not to proceed to Stage II financing (described in Baja's news release of July 26, 2012), the standstill will cease.
Among other requirements to keep the standstill from terminating, the Korean Consortium must acquire an additional 21% interest in MMB (for a total 51% interest) and control of MMB's board by no later than August 20, 2012. Under Baja's agreement with the Korean Consortium announced by Baja on July 26, 2012, the Korean Consortium will acquire such additional 21% interest and be entitled to appoint a majority of MMB's directors upon advancing to MMB US$45 million of the total US$90 million Stage I financing.