Austral Gold Obtains US$2M Related Party Loan
Austral Gold Obtains US$2M Related Party
Loan
Sydney, Australia--(Newsfile Corp. - September 25, 2024) -
Established gold producer Austral Gold
Limited
(ASX: AGD) (TSXV: AGLD) (OTCQB: AGLDF) (
"Austral"
or the
"Company"
) is pleased to
announce that Inversiones Financieras del Sur SA ("
IFISA
") has agreed to lend it the sum of US$2.0
million (the "
Loan
").
IFISA is the Company's largest shareholder and two of the Company's directors, Mr. Eduardo Elsztain
and Mr. Saul Zang, are also directors and shareholders of IFISA, and the loan is therefore considered to
be a 'related party' transaction.
Material terms of the Loan:
Amount:
US$2.0 million;
Interest Rate:
7% per annum;
Term:
24 months;
Use of proceeds:
working capital;
Collateral:
Up to 20,190,791 shares of Unico Silver Limited ("
Unico
") shares ("
Unico Shares
")
held by Austral Gold Canada Limited ("
AGCL
"), a wholly owned Canadian subsidiary of the
Company. The grant of the Collateral as security and guarantee is conditioned on receipt of
shareholder approval on a majority of the minority basis;
Shareholder Approval:
The Company will hold a meeting to obtain shareholder approval, with
IFISA and its related parties to abstain from voting, to grant a security interest in the Unico Shares.
Repayment:
Repayment of the Loan will be in cash and/or in Unico Shares (at the election of
Austral). Where repayment is to occur in part (or in whole) by Unico shares then the value of the
Unico shares will be equal to the greater of:
the 5-day volume-weighted average price; and
the closing price,
of the shares of Unico on the ASX on the trading day immediately prior to the date of transfer of the
Unico Shares to IFISA;
Early repayment:
No cost at the Company's discretion; and
Share Restriction:
AGCL cannot sell the Unico Shares (which form the Collateral) prior to the
repayment of the Loan (in full) without written authorisation from IFISA.
The Loan is exempt from the shareholder approval requirements provided for in TSXV Policy 5.9 as
contemplated in Part 5.7(a) Multilateral Instrument 61-101, although the sale of the Unico Shares, when
aggregated with prior sales to IFISA (as the lender) and its principals, would exceed the exemption
amount. It is for this reason that the security interest over the Unico Shares is conditioned on shareholder
approval as described above.
The Board of Directors of Austral, with the exception of the interested directors (being Mr. Eduardo
Elsztain and Mr. Saul Zang) who excused themselves, have approved the Loan, including the terms
described above (noting that the security interest is subject to shareholder approval). The Board, with the
exception of those interested directors, are of the view that the terms of the Loan, and the form of the
underlying loan agreement, without regard to the security interest, are as reasonable (or better) than if
Austral and IFISA were dealing at arm's length.
It is intended that the aggregate number of Unico shares available for recovery on enforcement under the
security interest would be equivalent to the amount owed under the Loan and interest.
If Austral does not repay the Loan by way of transfer of the Collateral, the Company plans to repay the
Loan in cash by the repayment date of September 2026 from future gold and silver sales from its 100%-
owned Guanaco-Amancaya mine complex.
The Company's requirement for cash outside of operations in the near term is primarily due to delays in
repairing critical equipment (high-pressure grinding roll HRC 800 equipment) which adversely impacted
production during the six months ended 30 June 2024 as previously announced through press releases
and quarterly reports during 2024.
The transaction reflects the continued ongoing financial support from the Company's major shareholder
to partially fund operations while it completes the installation and commissioning of equipment at its
100%-owned Guanaco-Amancaya mine complex and monthly production gradually increases.
About Austral Gold Limited
Austral is a growing gold and silver mining producer building a portfolio of quality assets in the Americas
based on three strategic pillars: production, exploration and equity investments. Austral continues to lay
the foundation for its growth strategy by advancing its attractive portfolio of producing and exploration
assets.
For more information, please visit the Company's website at
www.australgold.com.
Neither 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.
Release approved by the Company's Chief Executive Officer of Austral Gold, Stabro Kasaneva.
For additional information please contact:
David Hwang
Joint Company Secretary
Austral Gold Limited
+61 433 292 290
Jose Bordogna
Chief Financial Officer and Joint Company Secretary
Austral Gold Limited
+61 466 892 307
Forward-Looking Statements
Statements in this news release that are not historical facts are forward-looking statements. Forward-
looking statements are statements that are not historical, and consist primarily of projections -
statements regarding future plans, expectations and developments. Words such as "expects", "intends",
"plans", "may", "could", "potential", "should", "anticipates", "likely", "believes" and words of similar
import tend to identify forward-looking statements. Forward-looking statements in this news release
include those concerning the timing of the Loan, the Company's use of the proceeds, the Company's
plan to hold a meeting to obtain shareholder approval on a majority of the minority basis, to use the
Collateral to repay the Loan, and the Company's intent to repay the Loan in cash if the shareholders do
not approve application of the Collateral for that purpose.
All of these forward-looking statements are subject to a variety of known and unknown risks,
uncertainties and other factors that could cause actual events or results to differ from those expressed or
implied, including, without limitation, uncertainty of exploration programs, development plans and cost
estimates, commodity price fluctuations; political or economic instability and regulatory changes;
currency fluctuations, the state of the capital markets especially in light of the effects of the novel
coronavirus, uncertainty in the measurement of mineral resources and reserves and other risks and
hazards related to the exploration of a mineral property, and the availability of capital. You are cautioned
that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Austral
cannot assure you that actual events, performance or results will be consistent with these forward-looking
statements, and management's assumptions may prove to be incorrect. Austral's forward-looking
statements reflect current expectations regarding future events and operating performance and speak
only as of the date hereof and Austral does not assume any obligation to update forward-looking
statements if circumstances or management's beliefs, expectations or opinions should change other
than as required by applicable law. For the reasons set forth above, you should not place undue reliance
on forward-looking statements.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/224647