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.
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We acknowledge the [financial] support of the Government of Canada.