Detour Gold Initiates Consent Solicitation With Respect to 5.50% Senior Unsecured Convertible Notes to Allow Increased Financial Flexibility
TORONTO, ONTARIO--(Marketwire - May 30, 2012) -
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Detour Gold Corporation (TSX:DGC) ("Detour Gold" or the "Company") announces today that it will commence a solicitation of consents (the "Consent Solicitation") to amend the trust indenture (the "Indenture") governing its 5.50% Senior Unsecured Convertible Notes in the principal amount of US$250,000,000 due November 30, 2017 (the "Convertible Notes").
The purpose of the Consent Solicitation is to obtain approval for certain proposed amendments to the Indenture (the "Proposed Amendments") which would provide the Company with greater financial flexibility. The Company will pay a one-time consent fee calculated at the rate of 50 basis points (equivalent to US$5.00 per US$1,000 principal amount of the Convertible Notes, the "Consent Fee") to holders of the Convertible Notes who consent to the Proposed Amendments on or prior to the expiration date of the Consent Solicitation if the Proposed Amendments are successfully passed as set out in the consent solicitation statement (the "Consent Solicitation Statement"). The Proposed Amendments would, amongst other things as described in the Consent Solicitation Statement:
- Permit Detour Gold to establish a secured revolving credit facility of up to Cdn$100,000,000 for working capital purposes; and
- Expand a category of permitted indebtedness to include a broader range of instruments, including commercial letters of credit that secure obligations incurred in the ordinary course of business, and to permit such instruments to be collateralized by assets other than cash.
Gerald Panneton, President and Chief Executive Officer, commented, "The Detour Lake project remains on schedule and on budget for commencement of production in the first quarter of 2013. This is a prudent step for the Company as the Proposed Amendments will provide increased financial flexibility in establishing a revolving line of credit."