Marengo Mining together with its wholly-owned subsidiaries, Marengo Mining (Australia) Ltd, Yandera Mining Company Ltd, Marengo Mining (PNG) Ltd and Yandera Mining Company (Holdings) Pty Ltd, has agreed to a refinancing transaction with its major shareholder, Sentient Executive GP IV, Ltd for the General Partner of Sentient Global Resources Fund IV, LP. The refinancing ensures, among other things, financial support for the company’s operations through 2014.

The new agreement means Sentient will:

  • Convert the unsecured interest-bearing debt facility in the aggregate principal amount of US$10,000,000, dated February 6, 2013, as amended, due on December 31, 2013, along with interest of US$323,293 thereon, into new debentures of the company.
  • Exchange its aggregate principal amount of US$17,048,480 debentures issued in satisfaction of principal, interest and fees, pursuant to the debenture purchase agreement, dated as of May 27, 2013 for new debentures; and
  • Provide a letter of support to the company, confirming, among other things, that Sentient will ensure the company has sufficient funds to maintain solvency for a period of 12 months from the date of the signing of the company’s consolidated financial statements and entity accounts for the period ending December 31, 2013.

The aggregate principal amount of US$27,371,773 of new debentures will bear interest from and including the date of issuance at the rate of 9% per annum, payable in equal semi-annual instalments in arrears on April 30 and October 30 in each year and will mature on June 30, 2016.

Sentient and its related entities currently hold 21.97% of the common shares of Marengo and would hold about 65.26% of the common shares of the company, assuming the conversion of all the new debentures issued in connection with the refinancing.
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