Gowest still alive and well! Good for us!
2019-08-19 08:35 ET - News Release
Mr. Greg Romain reports
GOWEST ENTERS INTO SETTLEMENT AGREEMENT WITH PGB TIMMINS HOLDINGS
Gowest Gold Ltd. has entered into minutes of settlement with PGB Timmins Holdings LP, an investment vehicle controlled by Pandion Mine Finance LP, with respect to certain alleged defaults by Gowest of its obligations under the prepaid forward gold purchase agreement, dated as of Dec. 16, 2016, entered into between PGB and Gowest. Arising from the alleged defaults, PGB delivered to Gowest a Notice of Events of Default and Termination and a Notice of Intention to Enforce Security pursuant to section 244 of the Bankruptcy and Insolvency Act (Canada) on August 9, 2019 (the "Notices"). For further details, see Gowest press release dated August 9, 2016.
With respect to the settlement, Greg Romain, President and Chief Executive of Gowest, commented: "The achievement of a settlement with PGB provides the Company with the certainty necessary to move forward and to seek alternate financing solutions {&#A A ; –} in particular given that the Bradshaw project has been considerably de-risked since the agreement with PGB was initially entered into. We will ultimately come out of this process in a better position for shareholders and all other stakeholders as we continue to advance Bradshaw towards commercial production as quickly as possible."
Pursuant the terms of the Settlement Agreement:
PBG has withdrawn with prejudice both Notices on an irrevocable basis, with the right to reissue the Notices if Gowest does not satisfy its obligation to pay the Cash Settlement Amount (as defined below);
Gowest is obligated to pay to PGB an aggregate of US$9 million in cash as follows (i) US$1,500,000, as a non-refundable deposit, on or prior to 4:30 p.m. (Toronto time) on August 20, 2019, and (ii) US$7.5 million on or before October 16, 2019 (collectively, the "Cash Settlement Amount");
assuming the satisfaction of the Cash Settlement Amount, Gowest shall be further obligated to pay an aggregate of 3,500 ounces of gold produced from Bradshaw, at a rate of 15% of gold as produced, and the parties will be fully and finally released in respect of any and all claims and other matters arising in respect of the PPF Agreement; and
PGB has agreed that, if requested by Gowest, it will assign all of its right, title and interest in and under the PPF Agreement and all related security documents to a designee determined by Gowest in its sole discretion.
In connection with the entering into of the Settlement Agreement, Gowest has entered into a Memorandum of Understanding with a third-party investor that has agreed, subject to certain conditions, to acquire all of PGB's right, title and interest in and under the PPF Agreement and all related security documents for consideration sufficient for Gowest to satisfy its obligation to fund the full Cash Settlement Amount. Under the Memorandum of Understanding, the parties have further agreed in principle to certain fundamental amendments to the PPF Agreement favourable to Gowest. These amendments will be documented pursuant to an amended and restated PPF Agreement or a replacement agreement to be entered into immediately following the assignment of the PPF Agreement as contemplated under the Settlement Agreement.
About Gowest
Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Bradshaw Gold Deposit (Bradshaw), on the Frankfield Property, part of the Company's North Timmins Gold Project (NTGP). Gowest is exploring additional gold targets on its +100-square-kilometre NTGP land package and continues to evaluate the area, which is part of the prolific Timmins, Ontario gold camp. Currently, Bradshaw contains a National Instrument 43-101 Indicated Resource estimated at 2.1 million tonnes ("t") grading 6.19 grams per tonne gold (g/t Au) containing 422 thousand ounces (oz) Au and an Inferred Resource of 3.6 million t grading 6.47 g/t Au containing 755 thousand oz Au. Further, based on the Pre-Feasibility Study produced by Stantec Mining and announced on June 9, 2015, Bradshaw contains Mineral Reserves (Mineral Resources are inclusive of Mineral Reserves) in the probable category, using a 3 g/t Au cut-off and utilizing a gold price of US$1,200 / oz, totaling 1.8 million t grading 4.82 g/t Au for 277 thousand oz Au.
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