An article gives some info on future plans re debt. I don't like the bit about "unsecured creditor", but at least they are talking. I have held RSN since Sirocco days.
CS
http://www.msnbc.msn.com/id/26772135/
updated 8:46 a.m. ET Sept. 18, 2008 TORONTO, ONTARIO - GBS Gold International Inc. (TSX: GBS) ("GBS Gold" or the "Company") provides the following update regarding its existing C$46 million promissory note debt facility and its obligations with respect to the former owner of the Tom's Gully gold mine, Renison Consolidated Mines NL ("Renison").
The Administrators of the Company's Australian subsidiaries have now made contact with the Company's promissory noteholders and their trustee (together, the "Noteholders"). As previously advised, the secured promissory note debt facility became repayable following the appointment of Voluntary Administrators to the Australian subsidiaries on September 15, 2008. Discussions with the Noteholders have included a proposed forbearance agreement which would provide the Company with time to work with the Administrators and Noteholders on potential restructuring plans. Discussions regarding the proposed agreement and other matters are continuing.
The Company also advises that it has received a demand for payment on behalf of Renison in the amount of A$24 million pursuant to the Tom's Gully Sale Agreement entered into between the Company, Renison and certain subsidiaries of both entities on May 27, 2007. The demand notice also states that, without prejudice to any of their rights, Renison would be prepared to participate in a temporary debt moratorium to allow time to develop and consider any restructuring and refinancing plans of the Company,subject to reaching agreement on the precise terms of the moratorium. Accordingly, Renison is currently working on a forbearance agreement to effect the moratorium based on a draft provided by the Company.
The Renison demand notice alleges that, as a result of the appointment of Administrators by the Company's Australian subsidiaries, the following cash payments are now due and payable by the Company to Renison:
1) A$10 million originally scheduled for payment on January 25, 2009 in cash or shares at the Company's election;
2) A$8 million originally scheduled for payment on July 25, 2009 in cash or shares at the Company's election; and
3) A$6 million representing the buyout amount of a 2% gross royalty on gold produced and sold once cumulative production from the Tom's Gully tenements exceeds 300,000 ounces of gold, payable in cash or shares at the Company's election.
The Company notes that Renison's claim is unsecured. The Company is also seeking legal advice as to whether the amount claimed in paragraph 3 above is valid given that production at Tom's Gully commenced in August 2008 and has not exceeded 300,000 ounces. The Tom's Gully operation is currently being placed on care and maintenance by the Administrators pending re-evaluation.
RSN Price at posting:
$3.00 Sentiment: LT Buy Disclosure: Held
