Carpathian must pay Macquarie $27.54-million (U.S.)
2014-08-08 13:34 ET - News Release
Mr. Guy Charette reports
Carpathian Gold Inc. has concluded a further extended forbearance and amendment agreement with Macquarie Bank Ltd. in respect of the project finance facility entered into between Macquarie and the corporation's wholly owned subsidiary, Mineracao Riacho dos Machados Ltda. (MRDM). The agreement extends the previously announced forbearance period, which expired on July 31, 2014, to Aug. 29, 2014. As of today, Macquarie has advanced an aggregate of approximately $169.0-million (U.S.) to MRDM under the facility. There is no assurance that Macquarie will agree to any further extensions of the forbearance.
The corporation also advises that it has now received notice from Macquarie of its election to require payment by MRDM and the corporation of the completion guarantee refund amount and the production shortfall payment under the gold stream transactions with Macquarie. As previously disclosed, the gold stream transactions provide that, if during the period from July 1, 2013, to June 30, 2014, MRDM has not produced a minimum of 80,000 ounces of refined gold (of which 10,000 ounces would be deliverable to Macquarie), then Macquarie shall have the right to require MRDM and the corporation, jointly and severally, to refund to Macquarie an amount equal to that percentage of the upfront payments which is equal to the percentage of underproduction of refined gold over such 12-month period compared with that which was projected for such 12-month period as set out in the life-of-mine plan agreed at the time of closing of these transactions. During said 12-month period, MRDM produced a total of 8,168 ounces of refined gold, compared with the 100,000 ounces of refined gold that were projected to be produced under the life-of-mine plan that was agreed to at the time of closing of the gold stream transactions. Given the foregoing, the underproduction of refined gold during the 12-month period ending June 30, 2014, is equal to 91.8 per cent, and therefore, a refund amount of $27,549,600 (U.S.) is owed to Macquarie under the gold stream transactions.
Pursuant to the terms of the gold stream arrangements, MRDM and the corporation have elected to defer payment of the refund amount until the later of (i) the date upon which the violations and defaults under the facility have been remedied, and (ii) the date upon which the refund amount may be paid without constituting a default under the facility. The refund amount bears interest at the rate of U.S. prime plus 4 per cent. In respect of MRDM, Macquarie has agreed to forbear its rights to charge or accrue interest on the refund amount, or exercise any such rights with respect to interest, until Aug. 29, 2014. There is no assurance that Macquarie will agree to any extensions of the forbearance.
A bit more volume but down 6 cents on 73K shares is hardly earth shattering. Cheers