VANCOUVER, British Columbia, April 13, 2020 (GLOBE NEWSWIRE) -- SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the “Company”) announces that it has agreed to a deferral of the payment obligation which is due and payable to CIC on April 19, 2020.
Reference is made to the announcement of the Company dated March 19, 2020 (the "Announcement"). Capitalized terms used herein, unless otherwise defined, shall have the same meanings as those defined in the Announcement. On April 10, 2020, the Company and CIC entered into an agreement (the “2020 April Deferral Agreement”) pursuant to which CIC agreed to grant the Company a deferral of deferred cash interest and deferral fees of $2.0 million (the “April 2020 Deferral Agreement Amount”) which is due and payable to CIC on April 19, 2020 under the 2019 Deferral Agreement. The effectiveness of the 2020 April Deferral Agreement and the respective obligations, covenants and agreements of each party under the 2020 April Deferral Agreement are subject to the Company obtaining the requisite acceptance thereof from TSX.
The terms of the April 2020 Deferral Agreement are substantially similar to the terms of the prior deferral agreements dated February 19, 2020 and March 10, 2020 (the “Prior 2020 Deferral Agreements”) between the Company and CIC. The principal terms of the April 2020 Deferral Agreement are as follows:
- Payment of the April 2020 Deferral Agreement Amount will be deferred until June 20, 2020.
- As consideration for the deferral of the April 2020 Deferral Agreement Amount, the Company agreed to pay CIC a deferral fee equal to 6.4% per annum on the April 2020 Deferral Agreement Amount, commencing on April 19, 2020.
- The Company agreed to provide CIC with monthly updates regarding its operational and financial affairs.
- The Company agreed to comply with all of its obligations under the 2019 Deferral Agreement and the Amended and Restated Cooperation Agreement, as amended by the 2020 February Deferral Agreement.
- The Company and CIC agreed that nothing in the 2020 April Deferral Agreement prejudices CIC’s rights to pursue any of its remedies at any time pursuant to the 2019 Deferral Agreement, the Amended and Restated Cooperation Agreement and the Prior 2020 Deferral Agreements, respectively.
As previously disclosed in its press release dated February 19, 2020, the Company anticipates that a deferral will likely be required in respect of the monthly payments due and payable in the period between May 2020 and June 2020 under the 2019 Deferral Agreement and Amended and Restated Cooperation Agreement. The Company and CIC have agreed to discuss in good faith a deferral of these payments on a monthly basis as they become due. There can be no assurance, however, that a favourable outcome will be reached either at all or on favourable terms. The Company will make further announcements with respect to these discussions as and when appropriate.
Forward-Looking Statements
Certain information included in this press release that is not current or historical factual information constitutes forward-looking statements or information within the meaning of applicable securities laws (collectively, “forward-looking statements”), including information about discussions with CIC regarding a deferral of certain payments under the 2019 Deferral Agreement and Amended and Restated Cooperation Agreement. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, "could", "should", "seek", "likely", "estimate" and other similar words or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on certain factors and assumptions including, among other things, the Company’s ability to successfully negotiate a revised repayment schedule in respect of certain payments under the 2019 Deferral Agreement and Amended and Restated Cooperation Agreement and the TSX accepting the Company’s notice application in respect of the April 2020 Deferral Agreement and other similar factors that may cause actual results to differ materially from what the Company currently expects. Actual results may vary from the forward-looking statements. Readers are cautioned not to place undue importance on forward-looking statements, which speaks only as of the date of this disclosure, and not to rely upon this information as of any other date. While the Company may elect to, it is under no obligation and does not undertake to, update or revise any forward-looking statements, whether as a result of new information, further events or otherwise at any particular time, except as required by law. Additional information concerning factors that may cause actual results to materially differ from those in such forward-looking statements is contained in the Company’s filings with Canadian securities regulatory authorities and can be found under the Company’s profile on SEDAR at www.sedar.com.
If there is any inconsistency or discrepancy between the English version and the Chinese version, the English version shall prevail.
About SouthGobi
SouthGobi, listed on the Toronto and Hong Kong stock exchanges, owns and operates its flagship Ovoot Tolgoi coal mine in Mongolia. It also holds the mining licences of its other metallurgical and thermal coal deposits in South Gobi Region of Mongolia. SouthGobi produces and sells coal to customers in China.