SYDNEY, 11 June2019: Ark Mines Ltd (AHK) has agreed in principle terms with Chan Investments Limited (Chan), which will permit AHK to pay down and pay out Chan’s debt over an agreed period of time; raise further capital and a debt facility to pursue mining at its Glencoe project; and acquire other gold mining assets at the earliest opportunity. [the_ad id=”31605″] Chan holds securities over AHK assets pursuant to a Gold Loan Facility Agreement dated 4 August 2016. AHK could not proceed with gold mining at its Mt. Porter project due to termination of the Toll Treatment Agreement dated 14 November 2016 between AHK and NT Mining Operations Pty Ltd.
On 5 October 2018 Ark Mines Ltd (AHK) and Chan entered into a deed of forbearance and settlement. The Deed contemplated a sale of AHK’s Mount Porter and Frances Creek tenements and certain gold rights to Territory Iron Pty Ltd, the proceeds from which would have paid out Chan’s debt. The sale did not proceed as contemplated and with Chan’s consent, AHK terminated the sale.
As a consequence of the Sale Termination, AHK’s board reviewed matters and determined the most practical way forward was to procure funding to mine its Glencoe project, which includes a current Mining Management Permit (MMP) for open pit mining.
Amendment of the Deed was essential to contemplate and progress Glencoe Mining. AHK has undertaken a review of significant Glencoe data on file and has determined the project is economically viable, providing near term cash flow and equipment/recource synergies with AHK’s other projects in the Pine Creek district.
Out of all AHK’s gold projects, Glencoe poses the least resistance to production based on low impact gravity and floatation/or offsite processing. AHK anticipates Glencoe Mining to be the first phase of its production sequence amongst its assets in the Northern Territory.
Glencoe is located in the Pine Creek mineral field, approximately 120km SSE of Darwin in the Northern Territory and lies between the towns of Pine Creek and Adelaide River to the south east of Darwin.
AHK has issued a mandate to RC Advisers LLC, based in San Francisco to raise capital and a debt facility for AHK sufficient to progressively pay down Chan and enable AHK to swiftly progress preparations for Glencoe Mining as soon as is practicable.
Based on the Mandate, AHK and Chan have agreed in principle to amend and modify the Deed to permit AHK sufficient time to raise further capital and a debt facility (anticipated to be between AUD 6 million and AUD 10 million) intended to partly pay down Chan, acquire a gravitational gold processing plant and to commence Glencoe Mining, as soon as is practicable.
Chan has in principle agreed to forbear from exercising its claims, rights and remedies for the term of the Amended Deed, provided AHK makes agreed payments. AHK expects to sign an Amended Deed and any ancillary documents within 30 days.