Trading Symbol: TSX-V: IG
CALGARY, Dec. 21 /CNW/ - Infinito Gold Ltd. ("Infinito Gold" or the "Company") announces that its subsidiary in Costa Rica, Industrias Infinito S.A. ("IISA") has been advised that, as of December 18, 2009, the Constitutional Court, or ("SALA IV") has not come to a decision on the remaining legal challenges which have halted construction on the Company's Crucitas gold mining project.
This will delay a decision until the New Year as the SALA IV has now recessed for the Christmas season.
While the Company cannot predict the decision of the SALA IV, the Company has consistently maintained that all approvals and permits were applied for and received in compliance with the relevant regulations and laws.
The Company also announces that it has accepted an offer of a demand loan facility (the "Loan") for up to $6.0 million from Exploram Enterprises Ltd. ("Exploram"), its controlling shareholder, to bridge its short term working capital requirements and give it time to complete a project financing pending a ruling from the SALA IV. The indebtedness under the Loan is to be secured under the existing General Security Agreement between the Company and Exploram delivered in connection with the sale of convertible notes of the Company on February 10, 2009 (the "Prior Notes"). Interest is payable on the outstanding balance of the Loan monthly in arrears at a rate of 19.0% per annum, commencing on December 31, 2009.
The Company has been advanced $3.0 million but subsequent advances are at the sole discretion of Exploram and would be made in minimum increments of $500,000 up to a maximum of $1.0 million for each advance.
All indebtedness under the Loan is repayable on demand on or after the earlier of: the occurrence of an event of default under the Prior Notes, and February 28, 2010, but may be prepaid in whole or in part without penalty. In addition, all indebtedness under the Loan shall rank senior to all other indebtedness of the Company. There are no structuring fees to be paid by the Company in conjunction with the Loan. The closing occurred promptly upon acceptance of the offer of the Loan by Infinito as the funds were required urgently.
The Company advises that it continues to proceed with preparations for a project debt financing as it considers this course of action to be in the best interests of the Company in light of its cash flow needs, notwithstanding the proceedings before the SALA IV have not been resolved. No inference should be drawn from the advance of the Loan that the Company has secured project debt financing or that the SALA IV proceedings will be resolved favourably.
Caution Regarding Forward-Looking Information and Statements
Certain statements in this press release address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. These factors include, among others, the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the possibility that all necessary governmental and regulatory approvals will not be received, and the availability of a qualified workforce and third party contractors necessary for the development and operation of a mine. The Company undertakes no obligation to update these forward-looking information or statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking information or statements.
INFINITO GOLD LTD.
"The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release."
SOURCE Infinito Gold Ltd.
For further information: For further information: INFINITO GOLD LTD., 216, 102 - 8th Avenue S.W., Calgary, Alberta, T2P 1B3, Telephone: (403) 444-5191