Nov 18 Press Release:
newswire.ca
Greenstone sells Santa Rosa Mine
TORONTO, Nov. 18 /CNW/ - Greenstone Resources is pleased to report that
it has entered into an agreement to sell all the shares of its Panamanian
subsidiary, Minas Santa Rosa, S.A. (''MSR''), to Seabridge Resources Inc. in
return for the assumption of substantially all the liabilities of MSR. The
sale is subject to (i) additional due diligence focusing on metallurgical test
work, (ii) obtaining letters from the Company's banking syndicate and
bondholders agreeing to release MSR as a borrower and guarantor under the bank
credit facility and note indentures respectively, and (iii) Seabridge reaching
acceptable terms with MSR creditors in restructuring certain liabilities.
In order to improve cash flow, mining was suspended in February at the
Santa Rosa mine in Panama while gold production continued from leaching the
existing tonnes of ore on the pads. Subsequently, due to Greenstone's limited
cash resources, leaching of the ore was also suspended and the mine remains on
care and maintenance.
Greenstone's Chairman and CEO, Neil Raymond, explained that ''this is
another meaningful step in Greenstone's restructuring process. Greenstone's
management and Board of Directors have concentrated on maintaining the
integrity and viability of the operations. This event is significant as it
allows management to focus more of its time and resources on the Company's two
core assets, the San Andres Mine in Honduras and the Cerro Mojon Mine in
Nicaragua, while also eliminating a significant amount of the Company's
debt.'' The sale will result in a net gain of approximately $5.2 million and
removes liabilities in excess of $ 10 million, including accrued holding and
reclamation costs, from Greenstone's consolidated balance sheet.
Crucial to the restructuring, the Company continues to be in discussions
with its lenders and is confident that an accommodative solution and
recapitalization can be effected for the benefit of all stakeholders.
The Company's two principal assets are the San Andres Mine in Honduras
and the Cerro Mojon Mine in Nicaragua. Greenstone's shares trade on The
Toronto Stock Exchange (GRE) and the OTC Bulletin Board in the United States
(GRERF). |
