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Golden Dawn Operations and Corporate Update

VANCOUVER, BC / ACCESSWIRE / July 12, 2019 / Golden Dawn Minerals Inc., (TSXV: GOM | OTC: GDMRF | FRANKFURT: 3G8B), (“Golden Dawn” or the “Company”), provides the following update on the activities and status of its properties in the Greenwood mining camp of southern British Columbia. The Company is actively maintaining the assets and acquiring exploration permits while the corporation reorganizes and seeks financing and/or partners to advance the mine.

The Lexington mine and Greenwood mill sites remain on care-and-maintenance status with manned security at both sites. Operational dewatering continues at the Lexington mine to keep the mine pumped out and ready for the start of rehabilitation and mine operations. A more fuel-efficient generator was installed at the mine site to improve on costs. At the mill site, the potable water supply pump was replaced after an electrical storm knocked it out, and maintenance repairs were done to the security residence. Annual dam safety reports have been completed for the Greenwood tailings and May Mac tailings facilities and the required reports are being submitted to the Ministry of Mines as required. Water quality monitoring continues at all sites.

The company is providing an update to the debt reorganization and restructuring announced in the Company’s news release dated April 8, 2019. In its previous release, the Company announced that it had entered into a debt reorganization agreement with 1136130 B.C. Ltd. (“1136130”) to convert a significant amount of its existing debts into equity and to put its remaining liabilities owing to its major creditor RIVI Opportunity Fund LP (“RIVI”) into more manageable terms (the “Debt Reorganization Agreement”).

The TSX Venture Exchange (the “Exchange”), as a condition of acceptance of the Debt Reorganization Agreement and pursuant to Exchange Policies 3.2 and 5.1, has requested that the Company file with the Exchange the underlying loan and security agreements that are the subject of the option assigned to the Company by 1136130 as part of the Debt Reorganization Agreement. In addition to filing such loan documents with the Exchange, the Company further wishes to update and address its public disclosure of the Company’s debt and security obligations owed to RIVI. To that end, the Company hereby confirms that RIVI has entered into the following debt and security agreements with the Company and/or its subsidiaries:

  • Gold Purchase Agreement dated December 23, 2016 between the Company and RIVI (the “Gold Purchase Agreement”), as previously announced by Company’s news release dated January 3, 2017;
  • First Amendment to the Gold Purchase Agreement dated February 8, 2017 between the Company and RIVI;
  • Guarantee dated February 8, 2017 among the Company, RIVI, 1086359 B.C. Ltd and 6891667 Canada Inc. (both of which are wholly owned subsidiaries of the Company);
  • Mortgage dated February 8, 2017 between 1086359 B.C. Ltd. and RIVI, pursuant to which RIVI was granted a mortgage over certain mineral claims held by the subsidiary;
  • Mortgage dated February 8, 2017 between 1086359 B.C. Ltd. and RIVI, pursuant to which RIVI was granted a mortgage over certain mineral claims held by the subsidiary;
  • Second Amendment to the Gold Purchase Agreement dated May 4, 2018 between the Company and RIVI, as previously announced by Company’s news release dated February 9, 2017;
  • Promissory Note dated May 4, 2018 in the amount of US$1,000,000 in connection with the Gold Purchase Agreement; and
  • General Security Agreement dated May 4, 2018 between the Company and RIVI, pursuant to which RIVI was granted a security interest in all of the present and future undertakings and personal and real property of the Company and its wholly owned subsidiaries.

(collectively, the “RIVI Loan Documents”)

The Company hereby further confirms that it has entered into the following loan agreements with RC Advisors LLC (“RC Advisors”), a bona fide lender of the Company and associate of Kevin Puil, a principal of RIVI and a director of the Company:

  • Loan Agreement dated August 28, 2018 between the Company and RC Advisors (the “RC Advisors Loan Agreement”);
  • Promissory Note dated August 28, 2018 in the amount of US$12,000 in connection with the RC Advisors Loan Agreement;
  • Promissory Note dated October 5, 2018 in the amount of US$22,000 in connection with the RC Advisors Loan Agreement;
  • Promissory Note dated November 2, 2018 in the amount of CAD$10,000 in connection with the RC Advisors Loan Agreement;
  • Promissory Note dated November 8, 2018 in the amount of US$60,000 in connection with the RC Advisors Loan Agreement;
  • Promissory Note dated December 11, 2018 in the amount of US$30,000 in connection with the RC Advisors Loan Agreement; and
  • Promissory Note dated December 24, 2018 in the amount of US$42,000 in connection with the RC Advisors Loan Agreement.

(collectively, the “RC Advisors Loan Documents”)

The loan proceeds raised in connection with the RIVI Loan Documents and the RC Advisors Loan Documents were expended principally to fund property maintenance, dewatering, security and insurance commitments with respect to its Lexington and Golden Crown properties and the Company’s Greenwood processing plant. However, the Company did not achieve the intended goal of putting those properties into production. The Company initially intended to repay and service the loans out of cash flows from production at its Lexington and Golden Crow properties. Presently, and likely for the next 24 months, the Company is reliant on new equity financing or possible shares-for-debt agreements to repay the loans. However, in the longer term, it remains a goal of current management to achieve production from the Lexington and Golden Crown properties.

The Company understands that RC Advisors has unconditionally and irrevocably assigned all of its rights and interests in the RC Advisors Loan Documents to RIVI and that such rights and obligations form part of the debt obligations optioned and assigned under the Debt Reorganization Agreement and the RIVI Assignment Agreement (as such term is defined in the Company’s news release dated April 8, 2019). As of July 12, 2019 the Company confirms that the outstanding principal amount owing to RIVI, inclusive of unpaid and accrued interest and fees, in respect of the RIVI Loan Documents and the RC Advisor Loan Documents approximately equals USD$6,320,000.00.

The Company further announces that, in connection with the Debt Reorganization Agreement and subject to Exchange acceptance, it has agreed with 1136130 and RIVI to extend the date by which the option may be exercised from mid-July to August 14, 2019 to allow the Company additional time to undertake further equity financings necessary to exercise the option and complete the debt restructuring of the Company.

The Company also announces that it has closed the first and final tranches of the non-brokered private placement previously announced on March 18, 2019 and April 9, 2019, for gross proceeds of $392,500. Each Unit consists of one common share and one transferable common share purchase warrant. Each whole warrant will entitle the holder to purchase, for a period of 60 months from the date of issue, one additional common share of the Issuer at an exercise price of $0.375 per share. The financing closed in two tranches and the hold expiry date for the first tranche consisting of 4,500,000 units is September 8, 2019 and the second tranche hold expiry date totaling 3,350,000 units is September 17, 2019. This placement is closed, and no further receipts will be accepted. The proceeds of the private placement will be used for near-term general and administrative expenses and continuing property maintenance, dewatering, security and insurance commitments with respect to its Lexington and Golden Crown properties and its Greenwood processing plant.

The Company is also pleased to announce that as of July 9, 2019 Nicolette Keith has assumed the role of Corporate Secretary.

On behalf of the Board of GOLDEN DAWN MINERALS INC.

Per: “Christopher R. Anderson”

Christopher R. Anderson
Chief Executive Officer

For further information, please contact:

Golden Dawn Minerals Inc. - Corporate Communications:
Tel: (604) 488-3900
Email: office@goldendawnminerals.com

Forward-Looking Statement Cautions:

This news release contains certain "forward-looking statements" within the meaning of Canadian securities legislation, relating to, among other things, preliminary plans for a consolidation of the Company’s Shares. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "aims," "potential," "goal," "objective," "prospective," and similar expressions, or that events or conditions "will," "would," "may," "can," "could" or "should" occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include the possibility that the TSX Venture Exchange will not approve the proposed share consolidation, and that the Company may not be able to raise sufficient additional capital to continue its business. The reader is urged to refer to the Company's reports, publicly available through the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF SECURITIES OF THE COMPANY IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

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

SOURCE: Golden Dawn Minerals Inc.



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