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Last updated on April 20, 2014 at 8:28 EDT

Great Basin Announces Intercreditor Settlement Agreement

November 21, 2012

VANCOUVER, Nov. 21, 2012 /PRNewswire/ – Great Basin Gold Ltd. (the “Company”)
(NYSE MKT:GBG; JSE:GBG) announces that, in connection with its
restructuring proceedings commenced under Canada’s Companies’ Creditors Arrangement Act (“CCAA”), an order (the “Order”)  was made yesterday by the Supreme Court of
British Columbia (the “Canadian Court”) on the application of certain
unaffiliated holders (the “Noteholders”) of the Company’s senior
unsecured convertible debentures due 2014 issued pursuant to a trust
indenture (the “2014 Trust Indenture” and the debentures issued
thereunder, the “2014 Debentures”) approving a settlement agreement
(the “Settlement Agreement”) that resolves the Company’s current
litigation with the Noteholders over the delivery by Great Basin Gold
Inc., (“GBGI”), a wholly owned U.S. subsidiary of the Company, of a
secured guarantee (the “Burnstone Guarantee”) in favour of certain
lenders to the Company (the “Burnstone Lenders”).  The delivery of the
Burnstone Guarantee is a condition precedent to the Company’s DIP loan
facility (the “DIP Facility”), which was approved by order of the
Canadian Court on September 27, 2012. The Settlement Agreement
provides, among other things, that GBGI will also deliver to
Computershare Trust Company of Canada, the trustee appointed pursuant
to the 2014 Trust Indenture (the “Trustee”), a secured guarantee of the
Company’s obligations under the 2014 Trust Indenture and all 2014
Debentures issued thereunder.  The security to be granted to the
Trustee by GBGI will rank equally with the security for the Burnstone
Guarantee and subordinate to the existing security granted in favour of
the existing lenders to GBGI and its subsidiaries, and the security
granted to secure the DIP Facility.  Such guarantees and security by
GBGI result in a contingent cross collateralization using GBGI’s assets
to help secure existing obligations to the Burnstone Lenders and the
2014 Debentures.  The Company previously agreed to this contingent
cross collateralization in favour of the Burnstone Lenders as a
condition precedent to the DIP Facility and it was approved by the
Canadian Court in the CCAA proceeding.  The settlement resolves
litigation with the Noteholders in respect of the Burnstone Guarantee,
which was delaying the CCAA process.

The Order approving the Settlement Agreement authorizes and directs the
Trustee, for itself and on behalf of all the debentureholders, to
execute certain documents relating to and required by the Settlement
Agreement in order that it may be implemented.  The Order further
provides that the documents executed by the Trustee will each
constitute legal, valid and binding obligations of the Trustee and all
debentureholders enforceable against them in accordance with their
terms, and provides for delivery of notice of the Order to
debentureholders through CDS & Co (“CDS”). The Order also establishes that any application by any debentureholder
to seek to vary, rescind or otherwise affect the provisions of the
Order must be brought to the Canadian Court on or before December 11,
2012.
  Any debentureholder who does not bring such an application by that
date will lose the right to do so.  The Order facilitates
implementation of the Settlement Agreement, which will permit the
Company to fulfill its obligations under the DIP Facility previously
approved by the Canadian Court, and will permit further advances to be
made under the DIP Facility.

Copies of all relevant Settlement Agreement documents may be viewed on
the Monitor’s website at www.kpmg.ca/greatbasingold.

The Noteholders are represented by Fraser Milner Casgrain LLP in Canada,
Brown Rudnick LLP in the United States and Werksmans Attorneys in South
Africa. Debentureholders with questions related to the Settlement
Agreement are encouraged to contact those firms.

SOURCE Great Basin Gold Ltd.


Source: PR Newswire