Mandalay Resources Corporation Announces Completion of Revised Repurchase Offer and Consent Solicitation in Respect of 5.875% Secured Exchangeable Bonds
(Thomson Reuters ONE) -
TORONTO, May 24, 2017 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation
("Mandalay" or the "Company") (TSX:MND) announced today that Gold Exchange
Limited ("GEL"), an unaffiliated special purpose vehicle incorporated in Jersey,
has entered into agreements with respect to a revised repurchase offer (the
"Repurchase") and consent solicitation (the "Consent Solicitation") in respect
of its U.S.$60,000,000 principal amount 5.875% secured exchangeable bonds due
2019 (the "Bonds").
GEL issued the Bonds in 2014 and loaned the proceeds to a subsidiary of the
Company pursuant to the terms of a loan agreement and related funding agreement
(the "Loan") which together mirror the principal terms of the Bonds.
As indicated in Mandalay's press release of May 12, 2017, the original
repurchase offer and consent solicitation that GEL launched in respect of the
Bonds on April 19, 2017 (the "Original Proposed Transaction") was not completed.
However, GEL subsequently entered into discussions with Bondholders with respect
to implementing alternative arrangements in respect of the Bonds substantially
similar to the Original Proposed Transaction. The holders of 100% of the Bonds
have now executed a written resolution approving the Repurchase and Consent
Solicitation on the same terms as the Original Proposed Transaction except that
the interest rate payable on the Bonds has been increased from 5.875% per annum
to 6.875% per annum effective as of May 13, 2017. In addition, GEL has agreed to
pay each Bondholder a fee equal to 1.0% of the aggregate principal amount of the
Bonds held by it that are not repurchased pursuant to the Repurchase.
Pursuant to the Repurchase, GEL has agreed to purchase US$29,950,000 principal
amount of the Bonds from the holders thereof at a price of 105% of their
principal amount, plus accrued and unpaid interest at the rate of 6.875% per
annum for the period from (and including) May 13, 2017 to (but excluding) May
26, 2017. The Repurchase is expected to be completed on May 26, 2017.
In connection with the Consent Solicitation, the following amendments have been
made to the terms of the Bonds:
* extending the maturity date of the Bonds to May 13, 2022;
* deleting a condition of the Bonds that required that beginning on May
14, 2017, as additional security for the Bonds, GEL was required to start
depositing into a custody account, the aggregate number of shares of the
SPDR Gold Trust issuable upon exchange of the Bonds;
* adding a new covenant to the Bonds pursuant to which GEL will be required to
offer to repurchase a proportion of the Bonds outstanding at the relevant
time if and to the extent that the contained gold equivalent (in ounces) at
Mandalay's Costerfield mine falls below (initially) 232,000 gold equivalent
ounces;
* increasing the interest rate payable on the Bonds from 5.875% per annum to
6.875% per annum; and
* reducing the exchange price of the Bonds from US$149.99 to US$135.00.
Mandalay is required to fund any amounts required by GEL to repurchase Bonds
pursuant to the Repurchase and all associated fees and expenses (including
consent fees). The outstanding amount of the Loan has been reduced by an amount
equal to the principal amount of the Bonds repurchased pursuant to the
Repurchase and the terms of the Loan have been amended to mirror, where
applicable, the amendments to the terms of the Bonds.
Mark Sander, President and Chief Executive Officer of Mandalay, commented, "We
are pleased to have completed the revised repurchase transaction with GEL. This
revised repurchase agreement lowers our overall cost of debt service going
forward, while also reducing the Company's leverage and maintaining its debt net
of cash position of nearly zero. Removing the escrow provision on the loan is
advantageous for the Company as it allows us full use of our cash for value-
adding investments going forward. The updated agreement extends the maturity
for the balance of the loan out an additional three years, to 2022. With the
repurchase completed, we have increased our capacity to fund growth through
acquisitions or internal capital projects with an optimized mix of cash, debt,
or equity."
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing
assets in Australia, Sweden and producing and exploration projects in Chile. The
Company is focused on executing a roll-up strategy, creating critical mass by
aggregating advanced or in-production gold, copper, silver and antimony projects
in Australia, the Americas and Europe to generate near-term cash flow and
shareholder value.
Forward-Looking Statements:
This news release contains "forward-looking statements" within the meaning of
applicable securities laws, including statements regarding the Company's
production of gold, silver and antimony for the 2017 fiscal year. Readers are
cautioned not to place undue reliance on forward-looking statements. Actual
results and developments may differ materially from those contemplated by these
statements depending on, among other things, changes in commodity prices and
general market and economic conditions. The factors identified above are not
intended to represent a complete list of the factors that could affect Mandalay.
A description of additional risks that could result in actual results and
developments differing from those contemplated by forward-looking statements in
this news release can be found under the heading "Risk Factors" in Mandalay's
annual information form dated March 31, 2017, a copy of which is available under
Mandalay's profile at www.sedar.com. In addition, there can be no assurance that
any inferred resources that are discovered as a result of additional drilling
will ever be upgraded to proven or probable reserves. Although Mandalay has
attempted to identify important factors that could cause actual actions, events
or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results not
to be as anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.
For Further Information:
Mark Sander
President and Chief Executive Officer
Greg DiTomaso
Director of Investor Relations
Contact:
647.260.1566
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Mandalay Resources Corporation via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 24.05.2017 - 14:11 Uhr
Sprache: Deutsch
News-ID 544393
Anzahl Zeichen: 7920
contact information:
Town:
Toronto
Kategorie:
Business News
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