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Donner Metals (V.DON) defaults on agreement, forfeits interest in Bracemac-McLeod mine

Chris Parry Chris Parry, Stockhouse.com
0 Comments| September 3, 2013

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A tripartite agreement between Donner Metals (TSX:V.DON, Stock Forum), Sandstorm Metals (TSX:V.SND, Stock Forum) and operator Glencore Xstrata (OTO:GLCNF, Stock Forum) has been fundamentally changed after Donner failed to raise the funds needed to pay a cash call payable on August 12, 2013.

The company was informed by Sandstorm that, “as of August 15, 2013, Donner is in default of the Metal Purchase Agreement and that there has occurred a Donner event of default under the Metal Purchase Agreement.”

Donner, ultimately, took the only exit strategy available that delivered a possibility of staying in the Bracemac-McLeod business, by accepting shares in Sandstorm and a quick transition.

According to a press release, “Sandstorm Metals will issue 1.33 million shares of Sandstorm Metals to Donner and Donner has provided each of Glencore and Sandstorm Metals with an irrevocable and unconditional release and discharge of any claim by Donner against Glencore or Sandstorm Metals and Donner agreed to an orderly execution of the agreement.”

“The Board of Directors of Donner determined that, in the circumstances, it was in the best interest of Donner to cooperate with the orderly execution and delivery of the Assignment and Assumption Agreement as it was the sole scenario that provided some value to Donner and a viable possibility to develop a restructuring plan,“ said the release.

The company says it continues to hold interests in five Matagami joint ventures, where exploration continues, but share prices dropped 80% on the news of the forfeiture.


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