MONTREAL, Oct. 15, 2013 /CNW Telbec/ - Greg Struble, President and CEO
of Maudore Minerals Ltd. (MAO: TSX-Venture; MAOMF: US OTC; M6L: Frankfurt Exchange) is pleased to report that agreements have been
signed for the consensual restructuring of current debts owed to Cyrus
Capital Partners ("Cyrus"), in its capacity as a manager to FBC
Holdings S.à.r.l ("FBC"), as well as with the major unsecured creditors
at both Maudore and its operating subsidiary Aurbec Mines Inc.
("Aurbec"). This agreement allows Maudore to focus on increasing
production from the Sleeping Giant Mine where underground diamond
drilling has been proceeding for the past 6 weeks.
The Maudore agreement covers $2.36 million of trade credit, of which
$300 thousand is to be repaid by November 30, 2013 with the balance due
on October 30, 2014, with provision for additional payments as set out
below.
The Aurbec agreement covers $4.33 million of trade credit, of which $562
thousand is to be repaid by November 30, 2013 and a further $562
thousand is to be repaid by April 30, 2014 for a total reduction of
$1.12 million. The balance will be due on October 31, 2014. The Aurbec
trade creditors will be granted a first ranking charge on Aurbec's
rights and claims in respect of its Vezza Project ("Vezza Hypothec") to
secure any outstanding balance until repaid.
In consideration for the Vezza Hypothec and the payments by Aurbec,
Entrepreneur Minier Promec Inc. ("Promec") has agreed to discharge an
existing Hypothec which it registered on August 15, 2013 and has agreed
to ask the court that the Bankruptcy Petition filed on August 27, 2013
be withdrawn or dismissed.
Both agreements have been acknowledged by both FBC and Cyrus.
Mr Struble is pleased to further advise that Maudore has received, and
its Board has approved, a Consensual Restructuring Term Sheet Proposal
("Term Sheet") from Cyrus which provides the following:
-
Up to $6 million Liquidity Facility which matures at the same time as
the rest of the Standstill Agreements
-
One year of Interest Expense Deferral in the amount of $2.984 million to
be replaced by $2.984 million of 5% Convertible Debentures with a 3
year maturity
-
$725 thousand commitment to subscribe for their proportionate share of a
$4.72 million Rights Offering (the "Rights") details of which are set
out below
-
The existing Interest Escrow Account will be released and the net
proceeds applied to reduce the current term loan to $19.2 million
The Board of Directors of Maudore have received an opinion from Clarus
Securities Inc. regarding the terms and conditions of the Consensual
Restructuring Term Sheet Proposal stating that it is fair to the
Company, from a financial point of view.
Finally, Mr Struble hereby announces that Maudore intends to file a
prospectus for an offering of rights (the "Rights"), to all
shareholders as at a date to be determined. Each Right will entitle the
holder to purchase one share for each share held at a price per share
of $0.10. Based on the current shares outstanding, this would result in
total proceeds of $4.72 million, if fully subscribed. This will be
subject to approval by the TSX.V and other appropriate regulators.
As noted above, Cyrus has agreed to subscribe for all of their shares to
a total of $725 thousand as part of its overall Term Sheet proposal. In
addition, certain members of senior management have agreed to subscribe
for all of their rights plus such additional Rights that may not be
taken up to a total of $300 thousand. The proceeds of the offering will
be added to working capital to further improve the liquidity of the
Company. To the extent that the total funds raised exceed $2 million,
the trade creditors will be entitled to share in 50% of the excess
amounts pursuant to the terms of their respective Standstill
Agreements.
"We are naturally very pleased that we have been able to put this
Consensual Restructuring in place," Mr Struble stated. "It will allow
us to focus all of our attention on developing the tremendous potential
that we see at Sleeping Giant and increasing production."
Maudore's Chairman, Kevin Tomlinson, noted: "Despite the obvious
distractions caused by the recent restructuring challenges, management
has worked diligently to successfully restart the mining operations at
Sleeping Giant. The goal for us now is to define further high-grade
resources at Sleeping Giant where historically the grades have been in
the 9-13 g/t Au range with production levels circa 50 thousand oz/a."
About Maudore Minerals Ltd.
Maudore is a Quebec-based junior gold company in production, with mining
and milling operations as well as more than 22 exploration projects.
Five of these projects are at an advanced stage toward development with
reported current and historical resources and mining. Currently, gold
production is ramping up at Sleeping Giant. The Company's projects span
some 120 km, east-west, of the underexplored Northern Volcanic Zone of
the Abitibi Greenstone Belt and cover a total area of 1,570 km² with
the Sleeping Giant Processing Facility within trucking distance of key
development projects.
Cautionary Statement Regarding Forward-Looking Statements
This release and other documents filed by the Company contain
forward-looking statements. All statements that are not clearly
historical in nature or that necessarily depend on future events are
forward-looking, and the words "intend", "anticipate", "believe",
"expect", "estimate", "plan" and similar expressions are generally
intended to identify forward-looking statements. These forward-looking
statements include, without limitation, performance and achievements of
the Company, business and financing plans, business trends and future
operating revenues. These statements are inherently uncertain and
actual achievements of the Company or other future events or conditions
may differ materially from those reflected in the forward-looking
statements due to a variety of risks, uncertainties and other factors,
including, without limitation, financial related risks, unstable gold
and metal prices, operational risks including those related to title,
significant uncertainty related to inferred mineral resources,
operational hazards, unexpected geological situations, unfavourable
mining conditions, changing regulations and governmental policies,
failure to obtain required permits and approvals from government
authorities, failure to obtain any required approvals of the TSXV or
from shareholders, failure to obtain any required financing, failure to
complete any of the transactions described herein, increased
competition from other companies many of which have greater financial
resources, dependence on key personnel and environmental risks and the
other risks described in the Company's continuous disclosure documents.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Maudore Minerals Ltd.
