Yukon-Nevada Gold Corp. Plans to Enter Into A Prepaid Forward Gold Purchase Agreement
VANCOUVER, Aug. 3, 2011 /CNW/ --
VANCOUVER, Aug. 3, 2011 /CNW/ - Yukon-Nevada Gold Corp. (TSX: YNG) (Frankfurt Xetra Exchange: NG6) (the 'Company') is pleased to announce that it is currently negotiating
a Forward Gold Purchase Agreement (the 'Agreement') with Deutsche Bank
AG, London Branch ('Deutsche Bank'), a leading global provider of
financial solutions. Subject to satisfaction of all closing conditions
and internal approval requirements (including Deutsche Bank's credit
committee), Deutsche Bank will fund a US$120 million prepaid gold
forward facility (the 'Gold Facility') to Queenstake Resources USA,
Inc. ('Queenstake'), a subsidiary of the Company.
The facility is a forward contract currently structured to deliver
173,880 ounces of gold over a 48 month term (the 'Transaction'). The
schedule of gold payments is set forth as follows: during the first six
(6) months of the term, 1,000 ounces per month; for the next six (6)
months of the term, 2,000 ounces per month; for the final 36 months of
the term, 4,330 ounces per month. The 173,880 ounces of gold that have
been committed under this gold facility represent approximately 5.1% of
the total gold resources at Queenstake's wholly-owned Jerritt Canyon
property in Nevada, USA. Subsequent to the receipt of the US$120
million prepayment the remainder of the purchase price for the gold
will be paid to Queenstake upon completion of the monthly gold
deliveries to Deutsche Bank and will be equal to the amount that the
gold price exceeds US$850 and up to a maximum gold price of US$1,700.
Certain components within the Agreement, such as gold pricing
valuations, will be finalized at the time of prepayment, which is
anticipated to occur around August 12, 2011. As such, a subsequent news
release regarding the Agreement will be issued upon the date of
prepayment with the minimum and maximum gold prices per ounce
expressed. There is no interest payable to the Deutsche Bank during the
term of the facility.
Robert Baldock, President and CEO, states, 'We are very pleased to be
entering into this gold forward facility with Deutsche Bank, one of the
world's most reputable leaders in the global commodities market. This
gold loan facility will address all of our capital needs for the
Jerritt Canyon winterization and other announced cap-ex programs which
will enable us to achieve our production targets, increase
profitability and create lasting value for our shareholders.'
The repayment of the Gold Facility will be guaranteed by the Company and
various subsidiaries and will involve the registration of various
charges against the Company's assets in favour of Deutsche Bank. To
enable the grant of the requisite security, approximately $26 million
of the proceeds of the Loan will be used to repay the senior secured
notes issued to note holders led by Sprott Asset Management LP in
August 2010. The remainder of the proceeds are to be used for the
capital expenditures at the Jerritt Canyon property, including the
winterization of the processing facility, construction of the tailings
storage facility and development of the existing underground and open
pit mines in addition to further improvements to the gold production
processes to enhance throughput at the mill.
As Deutsche Bank currently holds securities representing more than 10%
of the Company's issued and outstanding voting securities (making it an
insider of the Company within the meaning of TSX policies and
applicable securities regulations) and as the value of the Transaction
is greater than 10% of the Company's market capitalization (assuming a
current market capitalization of approximately CDN$423 million based on
a share price of CDN$0.455), disinterested shareholder approval of the
Transaction is required pursuant to Section 501(c) of the TSX's Company
Manual. The Company expects to obtain the requisite shareholder
approval by means of written consents from holders of more than 50% of
the Company's voting securities (excluding those held by Deutsche Bank)
pursuant to Section 604(d) of the TSX Company Manual.
Yukon-Nevada Gold Corp. is a North American gold producer in the
business of discovering, developing and operating gold deposits. The
Company holds a diverse portfolio of gold, silver, zinc and copper
properties in the Yukon Territory and British Columbia in Canada and in
Nevada in the United States. The Company's focus has been on the
acquisition and development of late stage development and operating
properties with gold as the primary target. Continued growth will occur
by increasing or initiating production from the Company's existing
properties.
If you would like to receive press releases via email please contact nicole@yngc.ca and specify 'Yukon-Nevada Gold Corp. releases' in the subject line.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
WARNING: The Company relies upon litigation protection for
'forward-looking' statements.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The
securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the 'U.S. Securities Act')
or any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
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Yukon-Nevada Gold Corp.
Richard Moritz
Senior Director, Institutional Investor Relations
Tel: (604) 688-9427
Email: rmoritz@yngc.ca
Nicole Sanches
Investor Relations Manager
Tel: (604) 688-9427 ext 224
Email: nicole@yngc.ca
www.yukon-nevadagold.com
CHF Investor Relations
Jeanny So
Director of Operations
Tel: (416) 868-1079 ext. 225
Email: jeanny@chfir.com
www.chfir.com
AXINO AG
Wolfgang Seybold
Chairman Tel: 49 711 25 35 92 40
Email: wolfgang.seybold@axino.de
www.axino.de/