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Sabre Gold finalizes Debt and Stream Restructuring

by ahnationtalk on November 2, 202340 Views

Vancouver, November 2, 2023 – Sabre Gold Mines Corp. (TSX: SGLD, OTCQB: SGLDF) (“Sabre Gold” or the “Company”) is pleased to announce that it has finalized the restructuring of the Company’s current debt obligations and the gold stream over the Copperstone Mine with its secured creditors (the “Restructuring”). The terms of the Restructuring were the same as announced in the Company’s press release of October 3, 2023 (link here). The terms include: (i) partial early repayment of its debt obligations in return for the forgiveness of $3 million in accrued interest, (ii) amending the gold entitlement percentage under the gold stream in return for initial and deferred payments and shares in the Company, and, (iii) agreement to repurchase the 1.5% gross production royalty on the Copperstone Mine within 12 months for consideration of US$1,250,000.

“The Company is very pleased with the continued improvements of both our financial position and the potential economics of the Copperstone Mine. Once again, we thank our partners for their flexibility and cooperation in working with us on the restructuring and look forward to continuing our work on the fully permitted Copperstone Mine.” commented CEO & President Andrew Elinesky.

Transaction Details

The Company’s two lenders have forgiven an aggregate $3 million in accrued interest on their promissory notes in return for an initial cash payment totalling $3.95 million and deferred payments of $1.8 million and $1.2 million in 12 and 24 months, respectively. Following the payments, the Company will have an aggregate debt balance with the lenders of approximately $3.25 million plus any further accrued interest.

In addition, the Company and its streaming partner, Star Royalties Ltd. (“Star”), have amended the gold streaming agreement relating to the Copperstone Mine to fix the gold entitlement at 4% of the payable gold ounces produced for the life of mine. The agreement previously provided for an initial gold entitlement percentage of 6.6% that stepped down to 2.2% and 0.8% after cumulative gold deliveries of 14,000 and 18,133 ounces, respectively. As consideration for the amendment to the stream, the Company issued 7,407,407 common shares to Star and paid Star $1.55 million in cash and will make deferred payments of $1.2 million and $0.8 million in 12 and 24 months, respectively. The common shares issued in connection with the Restructuring are subject to a statutory hold period of four months and one day.

Finally, the Company has agreed to repurchase a 1.5% gross production royalty on the Copperstone Mine from the holder for consideration of US$1,250,000 payable within 12 months either in cash or in exchange for other certain assets of the Company.

All currency amounts are in Canadian dollars unless specified otherwise.

The issuance of the common shares in connection with the Restructuring has been conditionally approved by the Toronto Stock Exchange (the “TSX”) but remains subject to final approval from the TSX.

The terms of the Restructuring regarding the debt obligations of the Company and the repurchase of the royalty on the Copperstone Mine constitute related party transactions within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“), as the debtholders and the owner of the royalty are companies owned and controlled by directors of the Company. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1) (a) of MI 61-101 for both the debt restructuring the royalty buyback as in each case in respect of each related party the fair market value the subject matter of the transaction and the fair market value of consideration does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report in respect of the related party transaction at least 21 days before the transactions, which the Company deems reasonable in the circumstances so as to be able to avail itself of the restructuring of the debt obligations and the repurchase of the royalty in an expeditious manner.

For further information please visit the Sabre Gold Mines Corp. website: (www.sabre.gold).
Andrew Elinesky
CEO and President
416-904-2725

NT4

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