TORONTO, March 29, 2016 /CNW/ - Galane Gold Ltd.
("Galane Gold" or the
"Company") (TSX-V: GG) is pleased to announce that Galane
and its subsidiary, Galaxy Gold Mining Limited ("Galaxy")
have entered into a full and final settlement agreement with Traxys
Europe SA, Mine2Market S. à r.l. and certain others (collectively
the "Traxys parties") with respect to various outstanding
claims arising from the time period when the Traxys parties
operated Galaxy's mining operations. As a result of the
settlement, the Traxys parties unconditionally and irrevocably
cancelled and waived all claims in relation to the various contract
mining, off-take and tailings agreements and indebtedness entered
into or owed by Galaxy and/or its subsidiary, Galaxy Gold Reefs
Proprietary Limited ("Galaxy Gold Reefs"). The Traxys
parties have also released their security interests against
Galaxy's assets including its plant and mining licences.
In connection with the settlement, the Traxys parties have
agreed to settle its claim for US$4.3
million of indebtedness owing by Galaxy and Galaxy Gold
Reefs in exchange for the issuance by Galane Gold of unsecured convertible debentures
in the aggregate principal amount of US$3.2
million (the "Debentures"). The Debentures mature in
November 2019 and bear interest at 4%
per annum which accrues until the maturity date. The principal
is convertible at the option of the holder into common shares in
the capital of Galane Gold
("Common Shares") at a price of Cdn$1.00 per share, based on a pre-determined
exchange rate of US$1.00:Cdn$1.30. The interest is convertible into Common
Shares, based on a pre-determined exchange rate of US$1.00:Cdn$1.30,
at a price equivalent to the greater of Cdn$1.00 and the Discounted Market Price (as
defined by the TSX Venture Exchange) at the time of conversion,
subject to acceptance of the TSX Venture Exchange.
Chief Executive Officer Nick
Brodie stated, "We are pleased to have completed this
settlement with the Traxys parties. This settlement is a
significant step in our process of cleaning up legacy issues with
Galaxy and removes one of the final hurdles to recommencing
production. The exchange of a sizeable amount of short-term
indebtedness of Galaxy into long term indebtedness and the
cancellation of the security on the assets should provide
additional financial flexibility to implement our strategic vision
for Galaxy."
About Galane Gold
Galane Gold is an un-hedged gold
producer and explorer with mining operations and exploration
tenements in Botswana and
South Africa. Galane Gold is a public company and its shares
are quoted on the TSX Venture Exchange and the Botswana Stock
Exchange under the symbol GG. Galane
Gold's management team is comprised of senior mining
professionals with extensive experience in managing mining and
processing operations and large-scale exploration programmes.
Galane Gold is committed to
operating at world-class standards and is focused on the safety of
its employees, respecting the environment, and contributing to the
communities in which it operates.
Galaxy Description
Galaxy's mining assets are located on the Barberton Greenstone
Belt ("BGB"), approximately 10 km to the west of the town of
Barberton in the Mpumalanga Province of South Africa and include several historical
mining operations on the BGB as well as tailings storage facilities
comprised of previously mined and processed material. The
mining of gold in South Africa
began in Barberton, where the first traces of alluvial gold were
discovered in 1874. Historic production at Galaxy commenced
in the 1880s. To date, the mining assets have produced over
one million ounces of gold. The information regarding the quantity
of gold produced historically is based on available public sources,
has not been independently verified by the Company and should not
be relied upon as a predictor of future results.
Galaxy's existing processing plant is in need of refurbishment
and consists of a crushing, milling, flotation, thickening, Biox,
carbon in leach, elution and tailings disposal designed to treat
16,000 tonnes of ore per month. This facility can be expanded
through refurbishment and the introduction of larger mills and
flotation equipment.
Cautionary Notes
Certain statements contained in this press release constitute
"forward-looking statements". All statements other than statements
of historical fact contained in this press release, including,
without limitation, those regarding the Company's future financial
position and results of operations, strategy, proposed
acquisitions, plans, objectives, goals and targets, and any
statements preceded by, followed by or that include the words
"believe", "expect", "aim", "intend", "plan", "continue", "will",
"may", "would", "anticipate", "estimate", "forecast", "predict",
"project", "seek", "should" or similar expressions or the negative
thereof, are forward-looking statements. These statements are not
historical facts but instead represent only the Company's
expectations, estimates and projections regarding future events.
These statements are not guarantees of future performance and
involve assumptions, risks and uncertainties that are difficult to
predict. Therefore, actual results may differ materially from what
is expressed, implied or forecasted in such forward-looking
statements.
Additional factors that could cause actual results, performance
or achievements to differ materially are set out under the heading
"Risks and Uncertainties" in Galane
Gold's annual management's discussion and analysis for the
year ended December 31, 2014, a copy
of which is available on the Company's SEDAR profile at
www.sedar.com. Management provides forward-looking statements
because it believes they provide useful information to investors
when considering their investment objectives and cautions investors
not to place undue reliance on forward-looking information.
Consequently, all of the forward-looking statements made in this
press release are qualified by these cautionary statements and
other cautionary statements or factors contained or referenced
herein, and there can be no assurance that the actual results or
developments will be realized or, even if substantially realized,
that they will have the expected consequences to, or effects on,
the Company. These forward-looking statements are made as of the
date of this press release and the Company assumes no obligation to
update or revise them to reflect subsequent information, events or
circumstances or otherwise, except as required by law.
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 Galane Gold Ltd.