Maudore Receives Notice from their Senior Secured Creditor Regarding Enforcement of their Security and the Progress toward a Consensual Restructuring
MONTREAL, Oct. 3, 2013 /CNW Telbec/ - Greg Struble, President and CEO of Maudore Minerals Ltd. (MAO: TSX-Venture; MAOMF: US OTC; M6L: Frankfurt Exchange) reports that after close of markets on Wednesday October 2nd, the Company received a letter from Cyrus Capital Partners in its capacity as a manager to FBC Holdings S.A.R.L regarding defaults in the Credit Agreement covering FBC's $22 million secured term loan to Maudore and the state of negotiations with two major unsecured creditors at each of Maudore and its operating subsidiary Aurbec Mines Inc.
As previously reported on August 25th, Promec Mining filed a 'notice of bankruptcy proceeding' against Aurbec. As also previously reported, the Company believes the notice of bankruptcy proceeding is an invalid filing, and the Company has been vigorously working to have it dismissed. At the same time, the Company has been negotiating a consensual restructuring with our senior lender, our four major unsecured creditors and other stakeholders to implement our ongoing business plan.
On September 30th, in order to preserve cash, we chose to defer the payment of the Sept 30th interest due to FBC while negotiations continue. After the close of business yesterday, Cyrus put Maudore on notice that, while they are still prepared to proceed with a consensual restructuring which would see the major unsecured creditors join them in supporting Maudore's business plan, they would move to enforce their security if agreements to implement a standstill and consensual restructuring are not signed by our four major unsecured creditors by 9:00 AM EDT on October 7th.
In their letter Cyrus stated that they "remain supportive of the board and management of Maudore & Aurbec's efforts to maximize cash flow and reopen the Sleeping Giant mine".
Cyrus's commitment for financial support, which is contingent on our four major creditors signing Standstill Agreements, includes new funding to provide liquidity, deferral of future interest payments, and other components which Maudore believes would provide the Company with 12 months to successfully execute its business plan and generate the cash flows to repay our unsecured creditors.
As previously stated, the Company will do everything it can to ensure that all stakeholders are treated fairly in accordance with their legal entitlements, that no creditor receives preferential treatment, and affected creditors receive full payment to the extent possible.
About Maudore Minerals Ltd.
Maudore is a Quebec based junior gold company with milling operations and more than 22 exploration projects, of which five are at an advanced stage toward development with reported current and historical resources. The Company's projects span some 120 kilometers, east-west, of the underexplored Northern Volcanic Zone of the Abitibi Greenstone Belt and cover a total area of 1570 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.
The decision to start mining without these studies increases the uncertainty of success and increases the risk of failure if mining costs exceed revenue. Mining and unit costs from this exercise will provide accurate detail for future reports and studies.
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.