Maudore Reaches Consensual Restructuring Agreement and is now Focused on Increasing Production and Cash Flow at Sleeping Giant

MONTREAL, Oct. 15, 2013 /CNW Telbec/ - Greg Struble, President and CEO of Maudore Minerals Ltd. (MAO: TSX-Venture; MAOMF: US OTC; M6L: Frankfurt Exchange) is pleased to report that agreements have been signed for the consensual restructuring of current debts owed to Cyrus Capital Partners ("Cyrus"), in its capacity as a manager to FBC Holdings S.à.r.l ("FBC"), as well as with the major unsecured creditors at both Maudore and its operating subsidiary Aurbec Mines Inc. ("Aurbec"). This agreement allows Maudore to focus on increasing production from the Sleeping Giant Mine where underground diamond drilling has been proceeding for the past 6 weeks.

The Maudore agreement covers $2.36 million of trade credit, of which $300 thousand is to be repaid by November 30, 2013 with the balance due on October 30, 2014, with provision for additional payments as set out below.

The Aurbec agreement covers $4.33 million of trade credit, of which $562 thousand is to be repaid by November 30, 2013 and a further $562 thousand is to be repaid by April 30, 2014 for a total reduction of $1.12 million. The balance will be due on October 31, 2014. The Aurbec trade creditors will be granted a first ranking charge on Aurbec's rights and claims in respect of its Vezza Project ("Vezza Hypothec") to secure any outstanding balance until repaid.

In consideration for the Vezza Hypothec and the payments by Aurbec, Entrepreneur Minier Promec Inc. ("Promec") has agreed to discharge an existing Hypothec which it registered on August 15, 2013 and has agreed to ask the court that the Bankruptcy Petition filed on August 27, 2013 be withdrawn or dismissed.

Both agreements have been acknowledged by both FBC and Cyrus.

Mr Struble is pleased to further advise that Maudore has received, and its Board has approved, a Consensual Restructuring Term Sheet Proposal ("Term Sheet") from Cyrus which provides the following:

  • Up to $6 million Liquidity Facility which matures at the same time as the rest of the Standstill Agreements
  • One year of Interest Expense Deferral in the amount of $2.984 million to be replaced by $2.984 million of 5% Convertible Debentures with a 3 year maturity
  • $725 thousand commitment to subscribe for their proportionate share of a $4.72 million Rights Offering (the "Rights") details of which are set out below
  • The existing Interest Escrow Account will be released and the net proceeds applied to reduce the current term loan to $19.2 million

The Board of Directors of Maudore have received an opinion from Clarus Securities Inc. regarding the terms and conditions of the Consensual Restructuring Term Sheet Proposal stating that it is fair to the Company, from a financial point of view.

Finally, Mr Struble hereby announces that Maudore intends to file a prospectus for an offering of rights (the "Rights"), to all shareholders as at a date to be determined. Each Right will entitle the holder to purchase one share for each share held at a price per share of $0.10. Based on the current shares outstanding, this would result in total proceeds of $4.72 million, if fully subscribed. This will be subject to approval by the TSX.V and other appropriate regulators.

As noted above, Cyrus has agreed to subscribe for all of their shares to a total of $725 thousand as part of its overall Term Sheet proposal. In addition, certain members of senior management have agreed to subscribe for all of their rights plus such additional Rights that may not be taken up to a total of $300 thousand. The proceeds of the offering will be added to working capital to further improve the liquidity of the Company. To the extent that the total funds raised exceed $2 million, the trade creditors will be entitled to share in 50% of the excess amounts pursuant to the terms of their respective Standstill Agreements.

"We are naturally very pleased that we have been able to put this Consensual Restructuring in place," Mr Struble stated. "It will allow us to focus all of our attention on developing the tremendous potential that we see at Sleeping Giant and increasing production."

Maudore's Chairman, Kevin Tomlinson, noted: "Despite the obvious distractions caused by the recent restructuring challenges, management has worked diligently to successfully restart the mining operations at Sleeping Giant. The goal for us now is to define further high-grade resources at Sleeping Giant where historically the grades have been in the 9-13 g/t Au range with production levels circa 50 thousand oz/a."

About Maudore Minerals Ltd.

Maudore is a Quebec-based junior gold company in production, with mining and milling operations as well as more than 22 exploration projects. Five of these projects are at an advanced stage toward development with reported current and historical resources and mining. Currently, gold production is ramping up at Sleeping Giant. The Company's projects span some 120 km, east-west, of the underexplored Northern Volcanic Zone of the Abitibi Greenstone Belt and cover a total area of 1,570 km² with the Sleeping Giant Processing Facility within trucking distance of key development projects.

Cautionary Statement Regarding Forward-Looking Statements

This release and other documents filed by the Company contain forward-looking statements. All statements that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "intend", "anticipate", "believe", "expect", "estimate", "plan" and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements include, without limitation, performance and achievements of the Company, business and financing plans, business trends and future operating revenues. These statements are inherently uncertain and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, financial related risks, unstable gold and metal prices, operational risks including those related to title, significant uncertainty related to inferred mineral resources, operational hazards, unexpected geological situations, unfavourable mining conditions, changing regulations and governmental policies, failure to obtain required permits and approvals from government authorities, failure to obtain any required approvals of the TSXV or from shareholders, failure to obtain any required financing, failure to complete any of the transactions described herein, increased competition from other companies many of which have greater financial resources, dependence on key personnel and environmental risks and the other risks described in the Company's continuous disclosure documents.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Maudore Minerals Ltd.

For further information:

Greg Struble
President and CEO
+1 647 927 0239

George Fowlie
Deputy Chairman of the Board and Director of Corporate Development
+1 416 587 9801

Claudine Bellehumeur
Chief Financial Officer
+1 819 825 4343

Profil de l'entreprise

Maudore Minerals Ltd.

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