Gowest Gold Ltd. (“
Gowest” or the
“
Company”) (TSX-VENTURE: GWA) announced today that
it has completed its settlement with PGB Timmins Holdings LP
(”
PGB”) in accordance with the minutes of
settlement (the “
Minutes of Settlement”)
previously entered into between the parties. The material
terms and conditions of the Minutes of Settlement are described in
the Company’s August 19, 2019 press release. Pursuant to the
Minutes of Settlement, Gowest has paid to PGB the final required
cash payment of US$7.5 million. The parties are now fully and
finally released in respect of any and all claims and other matters
arising in respect of the Pre-Paid Forward Gold Purchase Agreement
(the “
PPF Agreement”), dated as of December 16,
2016, entered into between PGB and Gowest.
New Credit Agreement
In connection with the completion of the
settlement with PGB, Gowest has entered into a credit agreement
(the “Credit Agreement”), dated as of October 16,
2019, with Greenwater Investment Hong Kong Limited
(“Greenwater”), pursuant to which Greenwater
advanced US$7.0 million to Gowest. The proceeds advanced
under the Credit Agreement were used by Gowest, together with cash
on hand, to fund the final cash payment obligation owed to PGB
under the Minutes of Settlement. The Credit Agreement amends
and restates the PPF Agreement, which was assigned to Greenwater
(together with all security granted in favour of PGB under the PPF
Agreement), as part of the settlement with PGB.
Pursuant to the Credit Agreement, the
obligations thereunder are to be repaid in 33 equal consecutive
monthly payments of blended principal and interest, each such
payment totalling US$376,080, commencing as of May 2021. No
payments of principal or interest are required to be paid by Gowest
under the Credit Agreement until May 2021. All payments of
principal and interest under the Credit Agreement are payable in
cash and the Company has no future gold sale or delivery
obligations under the Credit Agreement.
Subject to the terms of the Credit Agreement,
the Company has the ability to prepay the obligations under the
Credit Agreement at anytime prior to November 1, 2020.
Further, at the option of the Company and subject to the terms of
the Credit Agreement, the payment obligations under the Credit
Agreement may be postponed for a period of up to six months such
that the first payment would not be due until November 2021.
The obligations of the Company under the Credit
Agreement are secured by a first lien (subject to permitted liens)
over all of the Company’s properties and assets, other than certain
excluded properties or assets specified in the Credit
Agreement. The representations and warranties, covenants,
events of default, and other terms and conditions of the Credit
Agreement are generally consistent with the prior PPF Agreement,
but modified as required to reflect the change in structure of the
transaction to a loan made by way of a single advance and payable
in cash.
Redstone Mill Term Sheet
The Company also announced today that it has
entered into a binding term sheet (the “Term
Sheet”) with Northern Sun Mining Corp. (“Northern
Sun”) with respect to the processing at Northern Sun’s
Redstone Mill in Timmins, Ontario of up to 30,000 tonnes of ore
developed from Gowest’s Advanced Exploration Bulk Sample program
(see Gowest news release dated May 25, 2017) at the Company’s 100%
owned Bradshaw Gold Deposit (“Bradshaw”). Upon
entering the Term Sheet, Gowest has terminated the agreement
entered into on October 30, 2018 with QMX Gold Corporation to
process material from Bradshaw at its Aurbel Mill located in Val
d’Or, Quebec.
Pursuant to the Term Sheet, which expires
September 30, 2020, Gowest is responsible for certain care and
maintenance costs of the Redstone Mill, in the form of a standby
fee of CDN$200,000 per month (which may be reduced to CDN$150,000
in certain circumstances). Gowest shall further be
responsible for any capital costs to be incurred by Northern Sun in
keeping with prudent practices for the processing the Bulk Sample
ore. In respect of any month in which Gowest ore is being
processed, the standby fee shall not be payable and Gowest will
instead be responsible for payment of the actual operating costs of
the Redstone Mill relating to the processing of such ore.
The commencement of processing the Bulk Sample
is subject to Northern Sun obtaining requisite governmental
consents and approvals. Northern Sun has undertaken to
diligently and expeditiously seek to obtain, using commercially
reasonable efforts, all required governmental consents and
approvals, including environmental approvals, necessary for the
processing of the Bulk Sample ore pursuant to the Term Sheet.
Northern Sun and Gowest have further agreed
under the Term Sheet to use commercially reasonable efforts to
negotiate and execute a long-term custom milling agreement of not
less than five years on commercially reasonable terms.
Gowest President & CEO, Greg Romain said,
“We are pleased to have the PGB settlement behind us so that we can
return our attention to developing Bradshaw. With the recent new
private Chinese ownership of Northern Sun, Gowest can now look
forward to processing material from Bradshaw at the Redstone Mill,
the mill which we believe is best suited for our needs. We
look forward to working with and continuing to advance our
relationship with the new owners of Northern Sun.”
About Gowest
Gowest is a Canadian gold exploration and
development company focused on the delineation and development of
its 100% owned Bradshaw Gold Deposit (Bradshaw), on the Frankfield
Property, part of the Company’s North Timmins Gold Project
(NTGP). Gowest is exploring additional gold targets on its
+100‐square‐kilometre NTGP land package and continues to evaluate
the area, which is part of the prolific Timmins, Ontario gold
camp. Currently, Bradshaw contains a National Instrument
43‐101 Indicated Resource estimated at 2.1 million tonnes (“t”)
grading 6.19 grams per tonne gold (g/t Au) containing 422 thousand
ounces (oz) Au and an Inferred Resource of 3.6 million t grading
6.47 g/t Au containing 755 thousand oz Au. Further, based on the
Pre‐Feasibility Study produced by Stantec Mining and announced on
June 9, 2015, Bradshaw contains Mineral Reserves (Mineral Resources
are inclusive of Mineral Reserves) in the probable category, using
a 3 g/t Au cut‐off and utilizing a gold price of US$1,200 / oz,
totaling 1.8 million t grading 4.82 g/t Au for 277 thousand oz
Au.
Forward-Looking Statements
Certain statements in this release constitute
forward-looking statements within the meaning of applicable
securities laws. Words such as “may”, “would”, “could”,
“should”, “will”, “anticipate”, “believe”, “plan”, “expect”,
“intend”, “potential” and similar expressions may be used to
identify these forward-looking statements although not all
forward-looking statements contain such words.
Forward-looking statements involve significant
risks, uncertainties and assumptions. Many factors could
cause actual results, performance or achievements to be materially
different from any future results, performance or achievements that
may be expressed or implied by such forward-looking
statements. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results,
performance or achievements may vary materially from those
expressed or implied by this press release. These factors
should be considered carefully and reader should not place undue
reliance on the forward-looking statements. These
forward-looking statements are made as of the date of this press
release and, other than as required by law, the Company does not
intend to or assume any obligation to update or revise these
forward-looking statements, whether as a result of new information,
future events or otherwise.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE
TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OF
THIS RELEASE.
For further information please contact:
Greg
Romain |
Greg
Taylor |
President & CEO |
Investor Relations |
Tel: (416) 363-1210 |
Tel: (416) 605-5120 |
Email: info@gowestgold.com |
Email: gregt@gowestgold.com |
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