MONTREAL, June 26, 2014 /CNW Telbec/ - Greg Struble, President and Chief Executive Officer of Maudore Minerals Ltd. (MAO: TSX Venture; MAOMF: US OTC; M6L: Frankfurt Exchange) ("Maudore" or the "Corporation"), announces today that the Corporation has completed the implementation of its previously announced consensual restructuring of its debts, and is now turning its focus to the review of its strategic alternatives in order to maximize value for its shareholders and other stakeholders.
Earlier Maudore had announced that it had reached an agreement (the "FBC Agreement") with FBC Holdings S.à.r.l. ("FBC") pursuant to which FBC has agreed to provide Maudore and its subsidiary Aurbec Mines Inc. ("Aurbec") with additional funding and to restructure the terms of their indebtedness to FBC, and that the shareholders of Maudore (excluding FBC and its affiliates) had approved the implementation of the FBC Agreement at the annual and special meeting of the Corporation held on May 22, 2014. The material definitive documentation giving effect to the final transactions contemplated by the FBC Agreement has now been executed such that all of the transactions with FBC have been completed.
In conjunction with the finalization of this debt restructuring, FBC has agreed to provide Aurbec with access to the full amount of its previously approved $2 million senior secured loan, with the proceeds to be used for general corporate purposes in continuing the operations at the Sleeping Giant Mine. FBC will also provide funding sufficient to satisfy Aurbec's new environmental bonding requirements in 2014 of approximately $0.9 million.
Maudore also announces that it has engaged Clarus Securities Inc. to provide it with advice in connection with a review of its available strategic alternatives which the Corporation has decided to initiate in order to maximize value for its shareholders and other stakeholders.
As regards the other major creditors of Maudore and Aurbec, the Corporation had previously announced that it had reached an agreement with other major creditors of Aurbec, who were owed an aggregate of approximately $3.4 million, for the payment to them of 14 monthly instalments of approximately $85,000, with a final balloon payment of approximately $2.2 million to be made in March 2015, in full settlement of such indebtedness. Today the Corporation further announces that it has also reached an agreement with additional major creditors of Maudore, who are owed an aggregate of approximately $2.0 million. This agreement calls for the payment to them of nine monthly instalments of $56,500 beginning in June 2014, in full settlement of such indebtedness and of various other obligations owing to them.
"While this restructuring and additional availability of working capital is an important milestone, we continue to face challenges as we work to develop the potential of the Sleeping Giant Mine," said Greg Struble. "The course forward will be to use this financing as a step toward the validation of the new resource zones recently opened up at depth and to further refine our strategic options for the Corporation going forward. The first step in this process will be, effective today, a temporary layoff to reduce the overall manpower by 54% down to a level that will only support the test mining in the new zones as well as continue to support toll milling for third parties as practical. In the coming weeks, we will be working closely with our lenders, suppliers and customers to develop a longer term strategy and mining plan based on the options assessed in our strategic review. We recognize the impact that this will have on our employees and the immediate communities and express our gratitude to them and to our lenders and business partners for their assistance and support in this endeavour."
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, all gold production is coming from the Sleeping Giant mine. The Corporation'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 1,285 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 Corporation 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 Corporation, business and financing plans, business trends and future operating revenues. These statements are inherently uncertain and actual achievements of the Corporation 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 TSX Venture Exchange, failure to obtain any required financing or identify or implement any strategic alternatives for the Corporation, 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 Corporation's continuous disclosure documents.
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