TORONTO, Dec. 13, 2016 /CNW/ - Melior Resources Inc.
("Melior" or the "Company") (TSXV:MLR) today provides an update on
its financial position in light of the Federal Court of
Australia's dismissal of Kasbah
Resources Limited's ("Kasbah") (ASX:KAS) application for
approval of the proposed acquisition of Kasbah by Asian Mineral
Resources Limited ("AMR") (TSXV:ASN) pursuant to a scheme of
arrangement (the "Scheme") under the laws of Australia.
As recently disclosed in the Company's press release dated
November 9, 2016, the continuing
operations of the Company remain dependent upon its ability to
raise adequate financing, to commence profitable operations in the
future, and repay its liabilities arising from normal business
operations as they become due. Failure to obtain sufficient
financing could force the Company into reorganization, bankruptcy
or insolvency proceedings. In connection with the Company's
efforts to secure additional financing and in reliance on the
financial hardship exemptions from the minority shareholder
approval requirements of Multilateral Instrument 61-101 –
Protections of Minority Security Holders in Special
Transactions, on November 9,
2016, Melior announced that it had reached an agreement with
Pala Investments Limited ("Pala") to amend the terms of its
August 2, 2015 loan facility (the
"Pala Facility"). In connection with the amendment to the
Pala Facility, Pala agreed to advance an additional US$300,000 to the Company, bringing the total
principal amount outstanding under the Pala Facility to
US$3 million. In addition, Pala
agreed to grant Melior a put option (the "Put Option") in respect
of the 47,272,727 shares of AMR (the "AMR Shares") owned by
Melior. Pursuant to its terms, Melior is entitled to exercise
the Put Option at any time following the completion of the Scheme,
which was expected occur on or about December 6, 2016. At the time of grant,
exercising the Put Option would have realized approximately
CAD$1.134 million to Melior and was
to form an integral part of the Company's plans to secure financing
to meet its obligations as they come due so as to avoid being
forced into reorganization, bankruptcy or insolvency proceedings.
Yesterday, AMR announced that the Federal Court of Australia has dismissed Kasbah's application
for approval of the Scheme. Investors may review AMR's public
disclosure regarding the proposed Scheme, including AMR's
December 12, 2016 press release for
further details.
The Australian court's failure to approve the Scheme and the
resulting inability of Melior to exercise the Put Option create
considerable uncertainty regarding the Company's ability to
continue as a going concern. In light of these developments,
Melior has initiated discussions with various potential funding
sources regarding potential plans or proposals that may involve one
or more of the following relating to the Company: restructurings;
issuance by the Company of additional indebtedness or additional
equity; refinancing existing indebtedness, disposition of material
assets of the Company or its subsidiaries and/or other strategic
alternatives. There can be no assurance that these discussions will
result in a plan or proposal with respect to any of the foregoing,
that any entity or person will agree to any definitive agreement
with respect to any of the foregoing, on what terms such definitive
agreement may take or that any of the foregoing will occur.
As such, the Company remains in serious financial difficulty and
there is considerable uncertainty regarding the Company's ability
to continue as a going concern.
Forward Looking Statements Disclaimer
Statements made in this news release may be forward-looking
and therefore subject to various risks and uncertainties. Such
statements can typically be identified by terminology such as
''may'', ''will'', ''could'', ''should'', ''expect'', ''plan'',
''anticipate'', ''believe'', ''intend'', ''possible'',
''continue'', "objective" or other similar expressions concerning
matters that are not historical facts. Certain material factors or
assumptions are applied in making forward-looking statements and
actual results may differ materially from those expressed or
implied in such statements. Melior does not undertake to update any
forward-looking statements; such statements speak only as at the
date made.
Going Concern Risk
As described in Melior's MD&A, the continuing operations
of the Company are dependent upon its ability to continue to raise
adequate financing, to commence profitable operations in the
future, and repay its liabilities arising from normal business
operations as they become due. There remains a significant risk
that the Company is unable to find alternative sources of financing
for on-going working capital requirements. There is a risk that the
Company may not be able to realize any cash proceeds from the Put
Option. These material uncertainties cast significant doubt upon
the Company's ability to continue as a going concern.
Failure to obtain sufficient financing, including as a result
of an inability to exercise the Put Option, could result in a delay
or abandonment of the Goondicum Mine and could force the Company
into reorganization, bankruptcy or insolvency proceedings.
Additional financing may not be available when needed or, if
available, the terms of such financing might not be favourable to
the Company and might involve substantial dilution to existing
shareholders. Failure to raise capital when needed would have a
material adverse effect on the Company's ability to pursue its
business strategy, and accordingly could negatively impact the
Company's business, financial condition and results of
operations.
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.
SOURCE Melior Resources Inc.
