Maudore Announces Update Regarding its Consensual Restructuring and the Termination of its Rights Offering
MONTREAL, Jan. 10, 2014 /CNW Telbec/ – Maudore Minerals Ltd. (MAO: TSX-Venture; MAOMF: US OTC; M6L: Frankfurt Exchange) announces that it will no longer proceed with the
rights offering that it initiated on December 20, 2013 and that was
scheduled to expire at 5:00 p.m. (Montreal time) on January 10, 2014
(the “Rights Offering“).
On January 8, 2014, Maudore finalized its revised 2014 mining operations
plan and financial forecast (the “2014 Budget“) which showed materially lower free cash flow for 2014 than originally
anticipated primarily due to: (i) lower gold price assumptions, (ii)
increased working capital requirements related to the restart of the
Sleeping Giant mine and (iii) the shift of certain production from 2014
to 2015. The majority of the reduced cash flow for 2014 represents
production timing issues and not a lower life-of-mine production
forecast. As a result of the reprofiling of cash flows in the 2014
Budget, the ability of the Company to meet its contractual repayment
obligations agreed to under the consensual restructuring proposal
entered into with its major creditors (the “Consensual Restructuring“) has become challenging.
In light of the foregoing, Maudore has entered into discussions with
Cyrus Capital Partners (“Cyrus“), in its capacity as a manager to FBC Holdings S.à r.l (“FBC“), regarding certain changes to the covenants and maturity of the
proposed $6,000,000 liquidity facility that FBC was to provide Maudore
as part of the Consensual Restructuring. Cyrus has advised Maudore
that it will require more time to diligence the 2014 Budget to
determine whether to amend the previous terms of its financial support
of Maudore in order to accommodate the cash flow profile of the 2014
Budget. Cyrus may also require that the Company agree to certain other
terms to protect its existing investment as part of its continued
forbearance and support of the Company. The Company has not yet had
discussions with its other secured and unsecured creditors about the
2014 Budget and its implications for the previously agreed terms of the
As a result of the required changes to the Consensual Restructuring and
the uncertainties surrounding the ability to secure creditor approval
of any changes, the Company has decided that it will no longer proceed
with the Rights Offering and all funds held by the Transfer Agent will
be returned to subscribers.
Maudore intends to continue assessing its strategic alternatives given
its current financial situation. Further announcements will be made by
the Company in due course.
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 of development with
reported current and historical resources and mining. Currently, gold
production is ramping up at the Sleeping Giant mine. 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.