Lydian Announces Extension of Forbearance Agreement
TORONTO, July 02, 2019 - Lydian International Ltd. (TSX:LYD) (“Lydian” or the “Company”) announced that the Company has entered into a second amended and restated forbearance agreement with its senior lenders, stream financing providers and equipment financiers (the “A&R Forbearance Agreement”) pursuant to which they have agreed to: (a) continue to temporarily suspend all principal and interest payments due and payable; and (b) continue to forbear from declaring or acting upon, or exercising default-related rights or remedies under such creditor’s financing agreement with respect to certain events of default, in each case, until the earlier of (a) September 30, 2019, (b) the occurrence of an additional event of default under such creditor’s financing agreement, or (c) any breach by the Company of the A&R Forbearance Agreement.
In accordance with the A&R Forbearance Agreement, the Company will issue 23,036,136 warrants to AB Svensk Exportkredit (publ) (“SEK”) (or as SEK or ING Bank N.V. (as agent under the SEK financing agreement) may direct) and 4,746,324 warrants to Ameriabank CJSC (or as Ameriabank CJSC may direct) pursuant to separate warrant certificates (collectively, the “Warrants”), which, if exercised as of the date hereof, would represent 3.5% of the issued and outstanding ordinary shares (on a fully diluted basis). The Warrants will be ordinary share purchase warrants, with each warrant being exercisable for one ordinary share of the Company. The Warrants will have a term of 5 years and holders will have the ability to exercise the Warrants on a cashless basis. The exercise price of the Warrants will be equal to the volume weighted average price of the Company’s ordinary shares during the five trading days preceding the effective date of the A&R Forbearance Agreement. The Warrants are subject to the approval of the Toronto Stock Exchange.
Orion CO IV (ED) Limited, Resource Capital Fund VI L.P. and Osisko Bermuda Limited have also agreed to extend the availability period and the maturity date under the Company’s existing credit agreement through an amendment to the Company’s existing credit agreement (the “Fourteenth Amending Agreement”).
The A&R Forbearance Agreement continues to be required as a result of the illegal blockades that have prevented Lydian and its contractors from entering the Amulsar site.
About Lydian International Limited
Lydian is a gold developer focusing on construction at its 100%-owned Amulsar Gold Project, located in south-central Armenia. However, illegal blockades have prevented access to Amulsar since late June 2018. Amulsar will be a large-scale, low-cost operation with production targeted to average approximately 225,000 ounces annually over an initial 10-year mine life. Estimated mineral resources contain 3.5 million measured and indicated gold ounces and 1.3 million inferred gold ounces as outlined in the Q1 2017 Technical Report. Existing mineral resources beyond current reserves and open extensions provide opportunities to improve average annual production and extend the mine life. Lydian is committed to good international industry practices in all aspects of its operations including production, sustainability, and corporate social responsibility. For more information and to directly contact us, please visit www.lydianinternational.co.uk.
For further information, please contact:
Bill Dean, Chief Financial Officer
Caution regarding forward-looking information
Certain information contained in this news release is “forward looking”. All statements in this news release, other than statements of historical fact, that address events, results, outcomes or developments that the Company expects to occur are “forward-looking statements”. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “intends”, “anticipates” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “will”, “would”, “should”, or “occur” or the negative or other variations of such terms. Forward-looking statements in this news release include, among others, statements with respect to: the issuance of the Warrants and the approval by the Toronto Stock Exchange of the Warrants; the realization of mineral resource estimates and the timing of development of the Amulsar Gold Project; the commitment to and implementation of good international industry practices; the expected gold production from, and life of mine of, the Amulsar Gold Project; and the expected mining methods at the Amulsar Gold Project. Statements concerning mineral resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered when the property is developed.
Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, without limitation: changes in gold and silver prices; adverse general economic, political, market or business conditions; failure to achieve the objectives of the future exploration and drilling programs; the speculative nature of mineral exploration and development; risks associated with obtaining and maintaining the necessary licenses and permits and complying with permitting requirements, including, without limitation, approval of the Armenian government and receipt of all related permits, authorizations or other rights, regulatory changes; as well as "Risk Factors" included in the disclosure documents filed on and available at www.sedar.com. Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. All of the forward-looking statements contained in this news release are qualified by these cautionary statements. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.