Nordic Gold Announces Agreement to Settle Its Secured Debt
October 7th, 2019 - Nordic Gold Inc. ("Nordic" or the "Company") (TSXV:NOR) is pleased to announce that it has today entered into an agreement to settle the outstanding CDN$63.4 million liability (as valued at September 30, 2019), plus care and maintenance funds over the last 3 months of approximately USD5 million, owed to Pandion Mine Finance (through their subsidiary PFL Raahe Holdings LP) ("Pandion") for total consideration of USD24.56 million payable over the following 24 months ("Consent and Agreement"). The new management team has been working closely with Pandion over the past 3 months to stabilize the Company and maximize shareholder value by returning the Laiva Mine to sustainable production. During that time Pandion has supported the Company by providing care and maintenance funds of approximately USD5 million to maintain the site and pay down liabilities on the Company's balance sheet. Additionally, the Consent and Agreement includes Pandion providing an additional USD900,000 to the Company for working capital purposes.
The Company is also encouraged that Pandion has demonstrated its support of the Company by agreeing to receive the first tranche of funds by participating in future capital raises. Accordingly, the Company will only make a cash payment to Pandion in 18 months, which will allow the Company to get into production before any payment is due Pandion.
The new management team has met with all of the Company's material creditors and stakeholders to ensure there are no unforeseen hurdles and to rebuild trust with the community. These meetings have been well received.
The Consent and Agreement marks a significant milestone in paving the way to return the Laiva Mine to production.
The key commercial terms of the Consent and Agreement are:
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1. Full settlement of the debt to Pandion on the payment of:
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a.USD1.56 million payable in equity on the completion of a CDN$7 million raise or pro rata on each tranche thereof;
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b.USD11.5 million due 18 months from the date hereof; and
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c.USD11.5 million due 24 months from the date hereof.
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2.Cancellation of gold deliveries to Pandion, its upside participation and free carry ('equity top up') right.
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3.Consolidation and forgiveness of the Pre-Paid Forward Gold Purchase Agreement dated November 10, 2017, as amended, and Maintenance Loan Agreement dated April 17, 2019 on payment of the consideration outlined above.
With the Consent and Agreement in place, the new management team at Nordic is now in a position to map a path forward to production. New management intends to provide further updates to its shareholders as circumstances warrant.
Nordic's President and CEO Brian Wesson stated: "finalizing this agreement with Pandion and stabilizing the Company has taken some time. However, it opens the door for the Company to focus on returning to positive cash flow and building shareholder value. The operations restart will be controlled and focused on ensuring that necessary technical work is completed. We thank Pandion for their support and commitment to the project and management, which support has been unwavering and confirmed through their increased investment in the future of the Company".
For further information, please contact:
Brian Wesson
President and Chief Executive Officer
info@nordic.gold
www.nordic.gold
+61 2 8823 3608
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About the Company
Nordic Gold Inc. is a junior mining company with a near production gold mine in Finland. The Laiva Gold Mine is fully built, fully permitted and was previously financed to production via a gold forward sale agreement provided by Pandion Mine Finance. The Laiva Gold Mine is currently not in production and is on 'care and maintenance'.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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