Trading Symbol: TSX-V: IG
CALGARY, Oct. 30 /CNW/ - Infinito Gold Ltd. (the "Company") announces that it has received waivers of events of default under the outstanding $50,500,000 Secured Convertible Notes (the "Notes") of the Company held by Exploram Enterprises Ltd. ("Exploram") and Auro Investments Ltd. ("Auro", and together with Exploram, the "Noteholders").
When the Notes were issued, the Company and the Noteholders expected the current Costa Rican legal challenge to the grant of a change of land use permit for the Crucitas mine before the SALA IV in Costa Rica would be resolved in time to permit the Company to complete the drawdown of funds under a project debt financing facility to finance commencement of construction at the Crucitas project by September 30, 2009. Consistent with this view, the Notes provided that it would be an Event of Default if the Sala IV proceedings had not been resolved favourably by June 30, 2009 and if the first drawdown under a project debt financing facility did not occur by September 30, 2009 and the first interest payment due under the Notes was payable on September 30, 2009.
As the court proceedings have not been resolved, the Company has not completed a drawdown under a project debt financing facility and does not have the funds to fund payment of interest due on September 30, 2009. The Noteholders have granted the Company a waiver of the events of default associated with its non-compliance with each of these provisions until November 30, 2009. In addition, as of September 30, 2009, the Company owed $4.4 million in accrued interest, plus structuring fees of $510,000 to the Noteholders, and the Noteholders have agreed to defer payment of these fees by the Company (and waived the defaults related to non-payment) until November 30, 2009. Interest is accruing on these unpaid amounts at a rate of 15% per annum. These waivers represent the fifth time since June 30, 2009 the Noteholders have waived events of default relating to the delay in receipt of a decision by the SALA IV, each previous waiver having been given for a period of approximately one month.
Exploram is the controlling shareholder of the Company and Auro is a company associated with Steven Dean, the Company's Chairman.
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., Suite 216, 102 - 8th Avenue S.W., Calgary, Alberta, T2P 1B3, Telephone: (403) 444-5191