Trading Symbol: TSX-V: IG
CALGARY, July 23 /CNW/ - Infinito Gold Ltd. (the "Company") has received and reviewed the full and detailed decision (the "Detailed Decision") of the Constitutional Chamber of the Supreme Court in Costa Rica ("SALA IV"), which was issued on Friday, July 9, 2010. The Detailed Decision is the detailed material which supports the summary decision (the "Vote") that was released on April 16, 2010 and announced in a press release on April 18, 2010.
The Vote ruled that the challenges raised against the grant of permits that allowed development of the Company's Crucitas gold project were without merit, with one exception that was considered to have been cured by the date of the Vote.
On April 17, 2010, the day after the Vote, groups opposed to the Crucitas project obtained an injunction (the "Injunction") from Tribunal Contenscioso Adminastrativo (the "Tribunal") that prohibits further development of the Crucitas Project.
On June 16, 2010 the Company filed a motion with the Tribunal arguing that the Injunction should be lifted in part because a higher court, the SALA IV, had already ruled on the substance of these matters. The Tribunal denied the Company's motion. However, the Tribunal indicated a reluctance to accept the argument that the SALA IV had already ruled on each of the relevant matters without seeing the Detailed Decision.
The Detailed Decision is now available and local counsel has advised the Company that the Detailed Decision appears to have addressed in significant detail the matters that were raised in the proceedings before the Tribunal.
The Company has its next scheduled hearing before the Tribunal on these matters on August 11, 2010 and its local counsel intend to use the Detailed Decision and other legal points to argue that the Tribunal should lift the Injunction and also dismiss the matters before the Tribunal.
Although the Company remains confident of its legal position there can be no certainty as to the timing or the outcome of any ruling by the Tribunal.
The Company also announces that it has accepted an offer of a demand loan facility (the "Loan") for up to $6.8 million from Exploram Enterprises Ltd. ("Exploram"), its controlling shareholder, to bridge its ongoing working capital requirements and give it time to complete a project financing pending a ruling from the Tribunal. 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.
The Company has been advanced $2.0 million pursuant to the Loan but subsequent advances are at the sole discretion of Exploram.
The Loan is in addition to $6.3 million in other demand loans (other "Demand Loans") that are also payable to Exploram, and is in addition to $50.5 million in principal owed under the Prior Notes.
All indebtedness under the Loan is repayable on demand at any time and may be prepaid in whole or in part without penalty. In addition, all indebtedness under the Loan shall rank equally with the other Demand Loans and 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 is prepared to continue the process to execute a project debt financing, notwithstanding the proceedings before the Tribunal 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 Tribunal 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.
President and CEO
"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 and 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