Holding ofcourse.
1) Creditor protection has been extended to April 25, 2013, by the CCAA judge. Creditor protection has been extended many times and we should expect further extensions so long as the judge believes GBG is acting in good faith and the restructuring is realistic.
2) Sale of the "Boulder Assets" in Tanzania - GBG's Tanzanian assets can be divided into the "Boulder Assets" which consist of those assets which are part of a JV arrangement with Shanta Gold, and the "Reef Assets" which consists of those assets which are part of a JV arrangement with African Barrick. Red Kite has agreed to purchase the Boulder Assets for 11.8 million consisting of 3 million cash and 8.8 million effectively as debt forgiven. The judge has authorized the transaction, but it is not a done deal yet as Shanta has the right to match it. So, the takeaway is that the Boulder Assets will sell for at least 11.8 million. GBG has been paying 2.9 million a month on this debt, so the cash flow situation at Hollister improves with the sale.
3) Financing - The 35 million DIP loan has been drawn down, but the amount borrowable under the DIP Loan Facility has been increased to 51 Million. Also, the Hollister Debt Facility has been increased by 10 million. So, we have 26 million in new funding to see the process through. If the cash flow forecast through April 26, 2013, is correct, the funding will be enough the get the company through that period.
4) Deadlines - The sales process for Hollister requires court approval of sale by April 19, 2013, with closing occurring with 30 days thereafter.
"A) No later than January 25, 2013 - draft purchase agreement and bidding procedures to be made available in GBGL's data room; B) No later than Febuary 15, 2013 - receipt of firm offers from stalking horse bidders, including markups of a purchase agreement and bid/auction procedures; C) No later than March 7, 2013 - court approval of the purchase agreement and bid/auction procedures; D) No later than April 12, 2013 - receive final bids; E) No later than April 15, 2013 - auction held; F) No later than April 19, 2013 - court approval of final offer and sale; and G) Closing of the sale of Hollister Assets shall occur not more than thirty days after the issuance of the court order." (from the sixth monitor report section 9.4)
Also, the deadline for the Business Rescue Practitioner to give a restructuring plan for Burnstone has been extended to May 31, 2013. The BRP notes that it can (legally) be further extended if need be. The BRP also expressed his belief that the rescue would take the form of a sale and that there are several interested parties and that a "successful" business rescue would be the outcome. "Successful" probably just means at minimum the creditors will get paid and he is primarily addressing creditors when he wrote that - so we shouldn't read too much into it.
5) Hollister - On December 24, 2012, GBG lowered the reserve and resource estimates which results in lowering the carrying value of Hollister to 90 million from 200 million based on the assessment given in September. I had hoped for more discussion and clarity on Hollister, but nothing illuminating was to be found. The December report does not include the tertiary material ( the September report did), it only includes the epithermal veins. The explanation is that more infrastructure build-out needs to be done to have it included, but that there is significant upside if the infrastructure could be further developed.
One further note, in the affidavits of Peter Gibson, our CFO, he uses the phrase "For the avoidance of doubt" over and over again. If rhetorical style indicates management style, the focus is on restoring confidence about management disclosures - seems appropriate.
AI
