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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (105856)	3/17/2014 7:43:16 PM
From: LoneClone	Read Replies (1) \| Respond to of 196713

Ontario court approves Colossus Minerals bankruptcy plan Under the bankruptcy plan gold-linked noteholders and Sandstorm are set to become Colossus' main owners. mineweb.com Author: Kip Keen Posted: Saturday , 15 Mar 2014 HALIFAX, NS (MINEWEB) - An Ontario court approved Colossus Minerals' bankruptcy plan, one that will see existing shareholders end up with a tiny fraction of their current ownership of the company. Colossus, now delisted from the Toronto Stock Exchange, was once a leading junior developer that attracted millions in cash through equity financings, debt and streaming financings to fund its Serra Pelada gold-platinum-palladium project in Brazil. Known for remarkable precious metal grades, the project captured attention for eye-catching drill intercepts over the years including 74 metres @ 31.17 gt Au, 3.02 g/t Pt and 6.78 g/t Pd. But outlining sizeable resources, overcoming water issues and getting last-ditch financing proved a challenge for Colossus as it attempted to bring the deposit to production. It had, by the end of 2013, built major facilities above ground and made significant underground developments. And, in recent years, Colossus attracted strong institutional shareholders and the backing of Sandstorm Gold with a $75 million streaming agreement. It also sold $86 million in gold-linked notes and, as recently as August 2013, it raised C$38 million in a private placement. With a maiden resource estimate out late last year, however, Colossus disappointed investors showing a very modest deposit in size, as modelled, with just 230,000 ounces gold @ 12.8 g/t Au in the indicated category. Meantime Colossus needed more money to tackle underground development but could not raise it, forcing it into bankruptcy. It has been passing through bankruptcy proceedings since early 2014. Those proceedings by and large wrapped up Friday when an Ontario court in Canada approved a bankruptcy plan (available here) that - as is typical in such cases - will leave existing shareholders with little stock in a reorganized Colossus. Instead gold-linked noteholders and Sandstorm are set to become Colossus' main owners. Key terms of the bankruptcy see Colossus stock consolidated 200 to 1 and then creditors receiving new shares linked to 30 percent of the value of their debt. (That is they get a new share for every dollar of debt, times 0.3, they are owed). According to that formula it appears Sandstorm Gold is to end up with over a third Colossus' new share count. Noteholders get about half. Current shareholders would end up with between 1 to 2 percent of Colossus new shares. Colossus could not be reached for comment Friday to confirm details and also respond to a question about whether it knew if a single entity controlled a significant portion of the gold-linked notes. According to the court order, Sandstorm's Tom Bruington, VP project developement, and John Budreski, a director, are to join Colossus' board of directors.