San Gold Corporation (SGRCF)

[goldenpolarbear]

It's now the owner because none of the solicited offers made during San Gold's lengthy creditor protection process was large enough to pay out the secured debt of US$23,750,000 owed by San Gold to Beechwood.

Because substantially all of San Gold's assets were acquired by the numbered company in what is referred to as a credit bid, San Gold does not have the ability to make a proposal to its other creditors.

Effective Tuesday, San Gold is effectively bankrupt.

Gord Neudorf, a partner with MNP Ltd., the court-appointed trustee in bankruptcy, said the first creditor meeting will be scheduled shortly.

But considering the fact the secured creditor has acquired the assets -- rather than get paid out in cash -- the meeting may be just a formality.

"We will do our work to see what happens," Neudorf said. "At this point, due to the fact that really all the assets are being covered by the credit bid, on the face of it, there would not be a distribution. But it is too early to say for certain."

But clearly, it is not promising.

In the trustee's seventh report to the court filed June 17, it said, "Given the structure of the APA (asset purchase agreement), if approved, all of the closing proceeds shall be payable to the lenders (Beechwood's numbered company). As the consideration offered equals the debt owed to the lenders, there will be no funds available for San Gold's subordinate creditors to the lenders."

San Gold has been operating the mine since 2005, but gold has been extracted from the Rice Lake area since the early 1930s.

http://www.winnipegfreepress.com/business/numbered-company-takes-over-bissett-mine-310005981.html

http://www.klondexmines.com/operations/true-north/overview

Gold Corp.’s new chief executive faces a straightforward challenge: mine much less gold, and make it profitable.

Greg Gibson was named CEO of San Gold on Tuesday, a formerly high-flying company that has fallen into a cycle of losses and liquidity problems like many other small gold miners. He said in an interview that his mandate is to shrink output to where it should have been in the first place.

“I see a small producer that always had ambitions to be a big producer. And when you take small mines and try to make big mines out of them, they don’t work,” Mr. Gibson, 52, said.

http://business.financialpost.com/news/mining/san-gold-corps-new-chief-greg-gibson-sees-smaller-mines-as-key-to-survival