News Release (clear as mud)
Canamex signs exclusivity deal for Bruner project
2021-04-06 13:32 ET - News Release
Mr. David Vincent reports
BRUNER GOLD PROJECT EXCLUSIVITY AGREEMENT, CONVERTIBLE DEBENTURES, FORBEARANCE AGREEMENT
Canamex Gold Corp. has provides an update regarding an exclusivity agreement on the Bruner gold project executed on March 31, 2021, and an update on the status of its secured convertible debentures issued by the company on Oct. 25, 2016, and Dec. 23, 2016, and which matured on Oct. 25, 2019, and Dec. 23, 2019, respectively.
Exclusivity agreement
On March 31, 2021, the company executed an exclusivity agreement with a third party, for the potential sale and purchase of the company's 100-per-cent controlling beneficial interest in the Bruner gold project.
Under the exclusivity agreement, the terms of the transaction are non-binding and indicative, until after completion of positive due diligence and completion of other customary closing conditions, including approval by the board and the shareholders of the company, and the execution of a definitive binding agreement.
The company will keep all stakeholders updated, on the progress of the transaction as milestones are completed.
If a definitive binding agreement is executed with regard to the transaction, then the gold forward sale agreement with MetalStream (detailed herein) will be terminated by the company, being a condition precedent.
Forebearance agreement
A forbearance agreement dated April 1, 2021, has been executed by the company and Concept Capital Management Ltd.
The debentureholder's agent has agreed to further forbear from exercising its rights and remedies under the debentures and related security documents arising from the delays by the company in paying interest and repaying the principal of the debentures, provided that the outstanding obligations under the debentures are repaid on or before Aug. 31, 2021.
If the company fails to make full payment, including any agreed penalties, on or before Aug. 31, 2021, then the debentureholder's agent shall be entitled, at its sole discretion, to enforce its rights under the loan documents.
Gold forward sale -- update
On July 15, 2020, the company provided an update regarding the status of its gold forward sale agreement with MetalStream, originally announced Jan. 27, 2020, and an extension announced April 23, 2020.
The company advised that the initial first tranche payment was increased to $5.5-million (U.S.) and was delayed due to COVID-19-related banking and logistic delays, experienced by MetalStream. Despite these COVID-19-related delays, the company and MetalStream remain fully committed to the agreement, and the first tranche payment is expected to be completed before Aug. 31, 2021.
The subsequent second and third tranches payable under the agreement were also amended as follows:
- a) Second tranche payment of $5-million (U.S.) was increased to $5.5-million (U.S.);
- b) Third tranche payment of $25-million (U.S.) was reduced to $24-million (U.S.).
The company proposes to use the proceeds from its agreement with MetalStream to settle the interest and any penalties, and repaying the principal of the debentures, on or before Aug. 31, 2021.
If a definitive binding agreement is executed with regards to the Bruner gold project transaction, then the gold forward sale agreement with MetalStream will be terminated by the company, being a condition precedent.
The company will keep all stakeholders updated, on the progress of the gold forward sale transaction with MetalStream.
About Canamex Gold Corp.
Canamex is a public listed company registered in British Columbia, Canada, trading on the Canadian Securities Exchange, and is engaged in predevelopment of the Bruner gold and silver project in the prolific gold jurisdiction of Nye county, Nevada. The region is home to several producing and past-producing mines along the Walker Lane trend. Canamex completed a positive preliminary economic assessment on the Bruner project in 2016. Based on additional drilling conducted on the property, the company completed an updated PEA in 2018, which increased the resources and improved the economics of the project.
The PEA is based primarily on indicated resources, but also included about 10 per cent inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.
Canamex is planning to move the Bruner project forward into permitting and development using the proceeds from a gold stream forward sale to MetalStream Ltd.
We seek Safe Harbor.