Apollo Gold Extends Maturity Date of Convertible Debentures to August 23, 2010 & Provides an Update on Discussions with Proje...
February 26 2010 - 12:06PM
Business Wire
Apollo Gold Corporation (“Apollo” or the “Company”) (TSX: APG)
(NYSE Amex: AGT) has reached an agreement with RAB Special
Situations (Master) Fund Limited (“RAB”), the holder of principal
amount $4,290,000 unsecured convertible debentures due February 23,
2010 (the “Convertible Debentures”), to extend the maturity date of
these Convertible Debentures to August 23, 2010. All dollar amounts
in this news release are in U.S. dollars.
The Convertible Debentures were issued in a private placement on
February 23, 2007 (the “Placement”) and amended on February 16,
2009. Each $1,000 principal amount of the Convertible Debentures is
convertible at the option of RAB into 2,000 of the Company’s common
shares (the “Conversion Price”), at any time until August 23, 2010.
Additionally, RAB may, at its election, concurrently convert any
accrued but unpaid interest in respect of the principal amount into
common shares at the Conversion Price.
Under the terms of the Convertible Debentures, $772,200 of
accrued and unpaid interest is due as of February 23, 2010, which
RAB and the Company have agreed will be paid in cash by March 3,
2010. In consideration for the extension of the maturity date of
the Convertible Debentures, the Company has agreed to issue to RAB,
as soon as practicable following receipt of all required regulatory
approvals, (i) 800,000 additional common shares of the Company (the
“RAB Shares”) and (ii) 2,145,000 common share purchase warrants
(the “RAB Warrants”) whereby one RAB Warrant entitles the holder to
purchase one common share at an exercise price of $0.50 per share,
expiring February 23, 2011.
The RAB Shares and the common shares issuable on conversion of
the Convertible Debentures and the exercise of the RAB Warrants are
expected to be registered with the United States Securities and
Exchange Commission.
Project Finance Facility
The Company is also progressing well in its discussions and work
with Macquarie Bank Limited and RMB Australia Holdings Limited
(together, the “Banks”) related to the prior announced technical
review of the Black Fox Mine in respect of the deferred scheduled
repayments and associated debt service reserve funding due in 2009
under the Company’s $70 million project finance facility (the
“Facility”). The Banks and the Company are jointly working towards
a new repayment schedule and restructuring of the Facility. The
Banks’ review of the new mine plan continues to progress
satisfactorily and the agreed February 28, 2010 completion date for
that review, together with the previous deferrals of the payments
due September 30, 2009 and December 31, 2009 have been extended to
March 31, 2010. The Company expects to produce 100,000 ounces of
gold from Black Fox in 2010.
Apollo Gold Corporation
Apollo is a growing gold producer that operates the wholly owned
Black Fox Mine in Ontario, Canada, which commenced gold production
in May 2009. Apollo is also exploring the adjoining Grey Fox and
Pike River properties, all in the Timmins gold district in Ontario,
Canada, as well as the Huizopa Joint Venture, (80 percent Apollo
and 20 percent Minas De Coronado, S. de R.L. de C.V.), an early
stage, gold-silver exploration project, approximately 16 kilometers
(10 miles) southwest of Minefinders’ Dolores gold-silver mine, in
the Sierra Madres in Chihuahua, Mexico. At December 31, 2009,
Apollo had approximately 264.2 million outstanding shares and 387.4
million fully diluted shares.
FORWARD-LOOKING STATEMENTS
This news release includes “Forward-Looking Statements” within
the meaning of section 21E of the United States Securities Exchange
Act of 1934, as amended. Forward-looking statements can be
identified by the use of words such as “may,” “should,” “expects,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“intends,” “continue,” or the negative of such terms, or other
comparable terminology. All statements regarding the issuance and
registration of securities to be issued to RAB, our discussions
with the Banks, the timing of any resolution in regards to a
revised payment schedule and gold production from Black Fox Mine in
2010 are forward-looking statements that involve various risks and
uncertainties. There can be no assurance that such statements will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from these forward-looking statements are disclosed
under the heading “Risk Factors” and elsewhere in Apollo documents
filed from time to time with the Toronto Stock Exchange, the NYSE
Amex, The United States Securities and Exchange Commission and
other regulatory authorities. All forward-looking statements
included in this news release are based on information available to
Apollo on the date hereof. Apollo assumes no obligation to update
any forward-looking statements.
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