geo.to - ' Geomaque Announces Completion of Debt Restructuring and US $1,265,000 Private Placement by Lender and Certain Major Shareholders
Toronto, Ontario
New Board of Directors and Officers Appointed
(Amounts quoted in US dollars)
Geomaque is pleased to announce that it has reached an agreement with its principal lender, Resource Capital Fund II L.P. of Denver, Colorado (``RCF'') to complete the restructuring of its credit and security arrangements with RCF under its agreement dated June 9, 2000. The key terms of the restructuring agreement are outlined below:
Payments to RCF
* Fixed payments totaling US$2,925,000 will be repaid quarterly over seven quarters commencing September 30, 2002.
* Payments equal to 40% available net cash flow from the Vueltas
del Rio Mine, after payment of the fixed payments to RCF and
Sococo (as described below) will also be made on a quarterly
basis commencing with the quarter ending September 30, 2002.
These payments continue until such time as RCF shall have
earned an amount sufficient to realize a 40% internal rate of
return on the net advances as at September 30, 2001 of
$2,925,000.
* In addition, after the satisfaction of the above amounts, RCF
shall receive a 10% Net Project Cash Flow Royalty Interest on
the Vueltas del Rio Mine.
Payments to Sococo de Costa Rica, S.A. (``Sococo'')
Sococo provides contract mining services to Geomaque Honduras' Vueltas del Rio mine, and is currently owed $1,685,000 for services performed prior to September 30, 2001. This amount will be paid quarterly over the 10 quarters commencing September 30, 2002.
Additional Working Capital
As part of its restructuring the Company has raised by way of a private placement of common shares an additional CDN $1,985,000 (equivalent to US $1,265,000) for working capital purposes as follows:
* RCF and other investors including two significant
institutional shareholders (collectively the "Subscribers")
have agreed to subscribe for common shares of the Company at
CDN $0.05 per share for gross proceeds of CDN $1,985,000 or US
$1,265,000. A total of 39,700,000 common shares will be issued
to the Subscribers in a private placement transaction, a
portion of which will be subject to shareholder approval. Upon
approval of the TSE, Geomaque will immediately issue 8,385,888
common shares for gross proceeds of CDN $419,294. The
remaining funds will be held in escrow and 31,314,112 commons
shares will be issued and the funds released from escrow upon
obtaining shareholder approval. It is expected that an
extraordinary general meeting of shareholders to approve this
private placement will be held early in February.
Board and Management Appointments
In conjunction with the completion of the Restructuring Agreement, a new Board of Directors and senior management team have been appointed.
Mr. John W. Hick will assume the role of President and CEO and become a member of the Board. Mr. Hick has held senior management positions with a number of mining companies and is a Director of several publicly-listed mining companies including Cambior Inc. and Rio Narcea Gold Mines.
Mr. Mario Caron will assume the position of Vice-President, Operations and join the Board of Directors. Mr. Caron, a mining engineer, was a Vice-President of PriceWaterhouseCoopers Securities Inc. and a former President of Eden Roc Mineral Corp.
In addition, Mr. Gordon Bogden and Mr. Bruce Higson-Smith will join the Board. Mr. Bogden is Managing Director of Beacon Group Advisors Inc., an M&A advisory group and is a former investment banking executive with Newcrest Capital Inc., N.M. Rothschild & Sons Canada Limited and CIBC Wood Gundy Securities Inc. Mr. Higson-Smith, a mining engineer, is a Vice-President of Resource Capital Funds.
Mr. Hick stated: ``With the restructuring complete and the addition of new working capital the new Board and management group will be able to focus on the optimization of the Vueltas del Rio asset so that the mine can achieve its full potential and provide value to the Geomaque shareholders''.
For further information please contact:
John Hick President and CEO (416) 956-7470 '
ca.us.biz.yahoo.com
... so RCF did choose to take control ... well, the king is dead, long live the king |
