TORONTO, April 2, 2015 /CNW/ - Atlanta Gold Inc.
(TSXV: ATG; OTCQX: ATLDF) announces that it has reached
agreement with Concept Capital Management Ltd. ("CCM"), the
holder of the Company's C$3 million
6% convertible debenture due December 15,
2016, to refinance the debenture. CCM had previously
requested that the debenture be redeemed by the Company in
accordance with the debenture's early redemption provisions.
Under the terms of the refinancing agreement, principal and
accrued interest on the debenture totaling C$3,250,000 will be satisfied by the issuance to
CCM of a new convertible debenture in the principal amount of
C$1,500,000 and the issuance to CCM
of the Company's senior secured notes ("Notes") in the
principal amount of US$1,500,000. The new debenture will bear
interest of 10% per annum and mature April
1, 2018. The new debenture will be convertible at
CCM's option following completion by the Company of a one-for-ten
consolidation of its common shares at a conversion price equal to
the lesser of C$0.17, and the
30-trading day average of the closing prices immediately following
the commencement of trading of the Company's shares on the TSX
Venture Exchange on a consolidated basis, provided that the
conversion price will not be less than C$0.10 per share.
The Notes to be issued to CCM pursuant to the refinancing will
have the same terms and conditions as the Company's outstanding
US$4 million principal amount Notes,
which were issued in August 2013. The Notes bear interest at
10% per annum and are secured by the limited recourse guarantee of
the Company's subsidiary, Atlanta Gold Corporation ("AGC"),
and by a first mortgage of AGC's interest in its Atlanta
Project. The maturity date of the outstanding Notes will be
extended by one year to August 31,
2018 and all of the Notes will be repayable in cash
installments at the rate of 25%, 35% and 40% on August 31st of 2016, 2017 and 2018,
respectively. CCM will also receive an option exercisable
until August 31, 2018 to purchase an
aggregate of 1,567.5 troy ounces of gold at US$1,100 per ounce (being 104.5 troy ounces for
each US$100,000 principal amount
Notes), with the option vesting at the rate of 25%, 35% and 40% on
August 31, 2016, 2017 and 2018,
respectively. The Company's outstanding gold options previously
issued with the Notes in August 2013
will be amended to have the same terms and conditions as the gold
options being issued to CCM.
A 2% refinancing fee will be paid by the Company in connection
with the transactions.
Completion of the refinancing transactions is subject to the
approval of the TSX Venture Exchange and the holders of a majority
of the outstanding Notes. Completion of the share
consolidation will, and the issuance of the new debenture may, be
subject to shareholder approval, which will be sought at the
Company's annual and special meeting of shareholders expected to be
held in June 2015.
The Notes and the new debenture, as well as the common shares
issuable on the conversion thereof, will be subject to a four-month
statutory hold period.
About the Company
Atlanta Gold Inc. holds
through its 100% owned subsidiary, Atlanta Gold Corporation,
leases, options or ownership interests in its Atlanta properties which comprise
approximately 2,159 acres (8.74 square kilometres) located 90 air
kilometers east of Boise, in
Elmore County, Idaho. A long
history of mining makes Atlanta
very suitable for development of new mining projects. The
Company is focused on advancing its core asset, Atlanta, towards mine development and
production.
Forward-Looking Information
This news
release contains forward-looking information and forward-looking
statements (collectively "forward-looking statements") within the
meaning of applicable securities laws with respect to the issuance
of the Notes and the new debenture, the amendment of the Notes and
the gold options and the completion of the common share
consolidation. Such are based upon various assumptions and other
factors that management believes to be reasonable, including that
the Company will receive the requisite approvals of the Exchange,
its Noteholders and its shareholders and will enter into definitive
documentation and complete the transaction in a timely
manner. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual
results to differ materially from those expressed or implied by the
forward-looking statements. Risks and uncertainties that may
cause actual results to vary include the receipt of requisite
approvals from the Exchange, the Noteholders and shareholders on a
timely basis; fluctuations in the gold price and currency exchange
rates; changes in general economic conditions and in the financial
markets; as well as other risks and uncertainties which are more
fully described in the Company's annual and interim management's
discussion and analysis and other filings by the Company with the
securities regulatory authorities, which are available under the
Company's profile at www.sedar.com. Should one or more risks
and uncertainties materialize or should any assumptions prove
incorrect, then actual results could vary materially from those
expressed or implied by the forward-looking statements and
accordingly, readers should not place undue reliance on the
forward-looking statements. Readers are cautioned that the
foregoing lists of risks, uncertainties, assumptions and other
factors are not exhaustive. The forward-looking statements
contained herein are made as of the date hereof and the Company
undertakes no obligation to update publicly or revise any
forward-looking statements contained herein or in any other
documents filed with securities regulatory authorities, whether as
a result of new information, future events or otherwise, except in
accordance with applicable securities laws.
To receive Company news via email, contact
info@atgoldinc.com and mention "Atlanta Gold News" in the
subject line.
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 OR
ACCURACY OF THIS RELEASE.
SOURCE Atlanta Gold Inc.