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Be the first with the news that moves the market- Serabi Gold (TSX:SBI) has renegotiated a unique loan agreement with Greenstone Resources
- Due to Covid-19, the Brazilian focused gold miner has struggled to operate and generate cash flow
- As a result, they have negotiated a payment schedule for the acquisition of a mine, with instalments increasing once international travel bans are lifted
- They have also extended their loan terms to cover this elongated acquisition process
- Serabi Gold (SBI) is trading at C$1.23 per share before market open and has a market cap of $72 million
Serabi Gold (TSX:SBI) has renegotiated the subscription deed it entered into with Greenstone Resources in January.
The agreement issued up to C$12 million of convertible loan notes to Serabi from Greenstone.
Serabi stated that as a “consequence of uncertainties caused by Coronavirus” the company has agreed to extend the period for the satisfaction of the loan.
The two companies have signed a new agreement to this affect. Serabi has used the loan to pay Equinox Gold for the final instalment of its purchase of the Coringa Gold Project.
Serabi and Equinox have also renegotiated terms for the final $16 million payment for that project.
Under the revised terms, Serabi will start making payments of $700,000 per month in May, June and July, before increasing to $1.4 million per month.
Once the payment increases to $1.4 million, it will remain in place until there are no international travel restrictions imposed by the Brazilian authorities and no travel restrictions within the state of Para, Brazil.
Once travel restrictions have been lifted, the balance must be paid within 6 weeks.
Mike Hodgson, CEO of Serabi, said the company was extremely grateful for the support shown by Greenstone and the understanding shown by Equinox, and that the companies have found a workable solution to complete the Coringa acquisition.
“Following a record month of production for March 2020, the operations are continuing to perform well and the staff at site are demonstrating true resolve and dedication for which I am very grateful,” he added.
Serabi Gold (TSX:SBI) is trading at $1.23 per share before market open.
