News ReleaseMandorin $1.1-million loan switched to convertible loan
Mandorin Goldfields Inc MGD
Shares issued 43,141,226 Jul 10 2003 close $ 0.02
Thursday July 17 2003 News Release
Mr. Malcolm Stevens reports
MANDORIN GOLDFIELDS INC NEGOTIATES $1,100,000 SHAREHOLDER LOAN TO CONVERTIBLE LOAN
CanAustra Holdings Limited, a significant and long-term shareholder, has offered to convert its $1.1-million loan to equity at a price 10 cents -- that is approximately three times the current market price. Directors believe that this event will result in a significantly strengthened balance sheet and is a precursor to Mandorin successfully exploiting the recently announced (see news in Stockwatch of April 28, 2003) acquisition of the worldwide rights to a new diamond exploration model or paradigm -- the KDC endeavour. The KDC endeavour provides Mandorin with the capacity to locate potential diamond exploration targets in previously unexplored areas of the world including North America, Australia and Europe.
Subject to regulatory and shareholder approval, CanAustra Holdings Limited (the lender), has agreed to substitute its $1.1-million loan to Mandorin for a convertible loan with a conversion price of 10 cents.
The principal terms of the convertible note are as follows:
the initial period is to Jan. 1, 2005;
the lender shall be deemed to have elected to convert the loan amount into shares, if, prior to Jan. 1, 2005, shares in Mandorin trade on the TSX Venture Exchange at a weighted average price of 10 cents per share or more for a period of 20 consecutive business days;
the lender has the right at any time prior to Jan. 1, 2005, to convert the loan amount into common shares of Mandorin at the rate of 10 cents per share. The loan amount may be converted as a whole or in part providing that any conversion is for a minimum amount of $100,000;
if, by Jan. 1, 2005, the lender has not exercised or been forced to exercise its option to convert the loan amount into shares, then the lender must renew the agreement on the same terms and conditions for a further period of one year and one day; and
the interest rate applicable to the convertible note is the generally declared prime interest rate of the Royal Bank of Canada for commercial loans made in Canada plus 2 per cent. Mandorin may elect to pay the interest either in cash or by increasing the loan amount.
WARNING: The company relies upon litigation protection for "forward-looking" statements.
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