VANCOUVER, Nov. 21, 2012 /CNW/ - Great Basin Gold Ltd. (the
"Company") (NYSE MKT:GBG; JSE:GBG) announces that, in connection
with its restructuring proceedings commenced under Canada's Companies' Creditors Arrangement
Act ("CCAA"), an order (the "Order") was made yesterday
by the Supreme Court of British
Columbia (the "Canadian Court") on the application of
certain unaffiliated holders (the "Noteholders") of the Company's
senior unsecured convertible debentures due 2014 issued pursuant to
a trust indenture (the "2014 Trust Indenture" and the debentures
issued thereunder, the "2014 Debentures") approving a settlement
agreement (the "Settlement Agreement") that resolves the Company's
current litigation with the Noteholders over the delivery by Great
Basin Gold Inc., ("GBGI"), a wholly owned U.S. subsidiary of the
Company, of a secured guarantee (the "Burnstone Guarantee") in
favour of certain lenders to the Company (the "Burnstone
Lenders"). The delivery of the Burnstone Guarantee is a
condition precedent to the Company's DIP loan facility (the "DIP
Facility"), which was approved by order of the Canadian Court on
September 27, 2012. The Settlement
Agreement provides, among other things, that GBGI will also deliver
to Computershare Trust Company of Canada, the trustee appointed pursuant to the
2014 Trust Indenture (the "Trustee"), a secured guarantee of the
Company's obligations under the 2014 Trust Indenture and all 2014
Debentures issued thereunder. The security to be granted to
the Trustee by GBGI will rank equally with the security for the
Burnstone Guarantee and subordinate to the existing security
granted in favour of the existing lenders to GBGI and its
subsidiaries, and the security granted to secure the DIP
Facility. Such guarantees and security by GBGI result in a
contingent cross collateralization using GBGI's assets to help
secure existing obligations to the Burnstone Lenders and the 2014
Debentures. The Company previously agreed to this contingent
cross collateralization in favour of the Burnstone Lenders as a
condition precedent to the DIP Facility and it was approved by the
Canadian Court in the CCAA proceeding. The settlement
resolves litigation with the Noteholders in respect of the
Burnstone Guarantee, which was delaying the CCAA process.
The Order approving the Settlement Agreement
authorizes and directs the Trustee, for itself and on behalf of all
the debentureholders, to execute certain documents relating to and
required by the Settlement Agreement in order that it may be
implemented. The Order further provides that the documents
executed by the Trustee will each constitute legal, valid and
binding obligations of the Trustee and all debentureholders
enforceable against them in accordance with their terms, and
provides for delivery of notice of the Order to debentureholders
through CDS & Co ("CDS"). The Order also establishes that
any application by any debentureholder to seek to vary, rescind or
otherwise affect the provisions of the Order must be brought to the
Canadian Court on or before December 11,
2012. Any debentureholder who does not bring such
an application by that date will lose the right to do so. The
Order facilitates implementation of the Settlement Agreement, which
will permit the Company to fulfill its obligations under the DIP
Facility previously approved by the Canadian Court, and will
permit further advances to be made under the DIP Facility.
Copies of all relevant Settlement Agreement
documents may be viewed on the Monitor's website at
www.kpmg.ca/greatbasingold.
The Noteholders are represented by Fraser Milner
Casgrain LLP in Canada, Brown
Rudnick LLP in the United States
and Werksmans Attorneys in South
Africa. Debentureholders with questions related to the
Settlement Agreement are encouraged to contact those firms.
SOURCE Great Basin Gold Ltd.
