Photo by: Reuters
TORONTO (miningweekly.com) – Gold streaming company Sandstorm Gold on Tuesday announced that Colossus Minerals had approved a proposal from Sandstorm and a group of Colossus convertible gold-linked notes holders to restructure Colossus' capital structure.
The restructure would entail converting its gold-linked notes and its precious metals purchase agreements with Sandstorm into equity.
Colossus on Tuesday filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act (Canada), which was intended to enable Colossus to pursue the restructuring and a sale process with the benefit of creditor protection and under court supervision.
As part of the restructuring, Sandstorm had agreed to cancel its gold and platinum purchase agreements announced on September 19, 2012, in exchange for a 1.6% net smelter returns royalty (NSR) and common shares of Colossus. Should the restructuring succeed, Sandstorm expected to own about 31% of the outstanding common shares of Colossus.
Sandstorm subsidiary, Sandstorm Metals & Energy, through a back-to-back agreement with Sandstorm Gold, held a palladium purchase agreement with Colossus and had agreed to cancel the palladium stream in exchange for a 0.4% NSR and about 8% of the outstanding common shares of Colossus.
Colossus is focused on the Serra Pelada mine, which is a joint venture between Colossus and Cooperativa de Mineração dos Garimpeiros de Serra Pelada, located in Para state, Brazil.