Aim- and TSX-listed Serabi Gold has announced that the publication of its yearly results will be delayed to no later than April 14, as allowed by the Canadian securities regulatory authorities.
The company’s financial statements for the three months and year ended December 31, 2019, would have been published on March 30.
The Canadian authorities have, however, granted exemptions allowing companies an additional 45 days to complete their regulatory filings.
In this extended timeframe, Serabi will assess the longer-term impacts of the economic and other uncertainties posed by the global coronavirus pandemic.
Until the financial results are shared, the company’s management and other insiders will observe a trading blackout.
Further, Serabi advises that, given the uncertainty caused by the virus outbreak globally, the company has agreed with Greenstone Resources to extend the period for the satisfaction of all the conditions necessary for the completion of a subscription for, and issue to, Greenstone of $12-million convertible loan notes.
The loan notes was announced on January 22 and approved by Serabi shareholders on February 26.
Both Greenstone and Serabi expect the subscription of the loan notes will be completed at a later date and, at that time, Serabi will be in a position to complete the payment of the final acquisition payment related to $12-million owed to Anfield Gold.
Anfield Gold is a subsidiary of Equinox Gold, and the acquisition related to the purchase of Chaleau Resources and its Coringa gold project, in Brazil.
It had been intended that, concurrent with the subscription by Greenstone for the loan notes, the existing secured loan owed by Serabi to Sprott Resource Lending Partnership would be settled in full from the existing cash holdings of the company.
As of Thursday, the principal owed to Sprott (excluding interest) was $4.65-million, with $1.16-million due to be paid on March 31. The net proceeds from the issue of the loan notes were intended to be used to settle the deferred consideration.
Serabi expects to have cash holdings of about $8.5-million at the end of March after payment of the next installment of the loan repayment to Sprott.
Meanwhile, the company continues to enjoy the full support of its major shareholders, Fratelli Investments and Greenstone, as well as the support of its secured lender, Sprott.
The existing loan agreement with Sprott provides for Serabi to pay down the remaining debt in four equal installments at the end of each calendar month.
Serabi advises that discussions with Equinox are ongoing.
The deferred consideration was due to be paid on March 31.
PRODUCTION IMPACT
Serabi continues to assess ways to mitigate the effects of coronavirus on its mining operations in Brazil.
The company expects it will not be able to achieve the production levels over the coming few months as intended, owing to fewer personnel being on site.
Serabi has, therefore, suspended its production guidance for the year.