Aug 11 2014
Carpathian Gold Inc. advises that it has concluded a further extended forbearance and amendment agreement with Macquarie Bank Limited in respect of the project finance facility entered into between Macquarie and the Corporation's wholly-owned subsidiary, Mineração Riacho dos Machados Ltda.
The Agreement extends the previously announced forbearance period which expired on July 31, 2014 to August 29, 2014. As of today, Macquarie has advanced an aggregate of approximately US$169.0 million 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 to the 100,000 ounces of refined gold that was 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 forgoing, the underproduction of refined gold during the 12-month period ending June 30, 2014 is equal to 91.8% and, therefore, a refund amount of US$27,549,600 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 US prime plus 4%. In respect of MRDM, Macquarie has agreed to forebear its rights to charge or accrue interest on the refund amount or exercise any such rights with respect to interest until August 29, 2014. There is no assurance that Macquarie will agree to any extensions of the forbearance.
Source: http://www.carpathiangold.com/