To: Brigus Gold Corp. And to: Brigus Gold ULC
EXHIBIT
99.2
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And
to:
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Brigus
Gold ULC
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Each
of:
Xxxxx
000, 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxx Xxxxxx
B3J
3Kl
Canada
Attention:
Xxxx Xxxx
By Email:
xxxxx@xxxxxxxxxxxxxx.xxx
October
1, 2010
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RE:
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Third
Consent Extension Letter
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1.
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We
refer to:
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(a)
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the
Project Facility Agreement dated as of February 20, 2009, (as amended,
restated, renewed or otherwise modified from time to time, including,
without limitation, pursuant to Deferral Consents dated 28 September 2009,
30 December 2009 and 25 February 2010) among Apollo Gold Corporation (now
Brigus Gold Corp, being the “Borrower”), as borrower, Macquarie Bank
Limited (“MBL”) and RMB Australia Holdings Limited (“RMB”) (together
“Financiers”), as financiers and RMB Resources Inc. (the “Agent”), as
agent and security agent for and on behalf of the Financiers (the
“PFA”);
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(b)
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the
Consent Letter issued with respect to the PFA by the Financiers and the
Agent to the Borrower and Linear Gold Corp. (now Brigus Gold ULC, being
“Linear”) dated 9 March 2010 (the “Consent
Letter”);
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(c)
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the
amendment and extension to the Consent Letter issued by the Financiers and
the Agent to the Borrower and Linear dated 3 August 2010 (“First Consent
Extension Letter”); and
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(d)
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the
further amendment and extension to the Consent Letter issued by the
Financiers and the Agent to the Borrower and Linear dated 27 August 2010
(“Second Consent Extension
Letter”).
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Terms and
expressions defined in the PFA, the Consent Letter, the First Consent Extension
Letter or the Second Consent Extension Letter (or defined therein by reference
to another agreement) shall have the same meaning when used in this letter
unless otherwise defined. The Consent Letter, the First Consent Extension Letter
and the Second Consent Extension Letter shall be referred to collectively as the
“Consent Letters”.
1
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2.
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Pursuant
to the terms and conditions of the First Consent Extension
Letter:
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(a)
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the
Financiers agreed to extend the date for delivery of the Deliverables to
30 September 2010, subject to the satisfaction of certain conditions set
out in paragraph l(c) of the First Consent Extension Letter including,
without limitation, that the Deliverables were in a form and substance
satisfactory to the Financiers and, where relevant, complied with the
requirements of the Consent Letter, the First Consent Extension Letter and
the PFA; and
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(b)
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the
Financiers agreed to replace the Consent Letter Repayment Schedule with
the Interim Repayment Schedule subject to the satisfaction of certain
conditions set out in paragraph 2(d) of the First Consent Extension Letter
including, in particular, but without limitation, that the Borrower
deliver the Deliverables to the Financiers by 30 September 2010 as
required by and in accordance with the conditions set out in paragraph 1
of the First Consent Extension
Letter.
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3.
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The
Borrower has advised the Financiers that the Borrower has received an
offer for:
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(a)
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a
bought deal equity offering of units (“Unit Offering”) to raise minimum
gross proceeds of CDN$45,000,000;
and
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(b)
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a
sale on a guaranteed agency basis of flow through shares to raise minimum
gross proceeds of CDN$5,000,000 (“Flow Through
Offering”),
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with the
possibility of the gross proceeds from the Unit Offering and the Flow Through
Offering being increased by up to 15% by way of the purchase of any combination
of additional units or flow through shares (“Increased Offering”). The net
proceeds of the Unit Offering, including any additional proceeds from the
Increased Offering arising from the result of the issue of additional units
(“Additional Unit Proceeds”), are hereinafter referred to as the “Equity
Proceeds”.
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4.
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The
Borrower has informed the Financiers that it intends to use the Equity
Proceeds in the following manner:
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(a)
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to
apply up to a maximum amount of CDN$5,000,000 for general corporate
purposes and working capital (“Working
Capital”);
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(b)
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to
apply 50% of the balance of the Equity Proceeds, subject to a minimum
amount of CDN$18,000,000, to reduce the Principal Amount outstanding under
the Facility;
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(c)
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to
apply the remaining balance of the Equity Proceeds, subject to a minimum
amount of CDN$18,000,000, to reduce outstanding liabilities under the
Financier Hedging Agreements.
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2
This
letter sets out the terms and conditions of the proposed application of the
Equity Proceeds, and the agreement between the Borrower and the Financiers with
respect to the ongoing covenants and obligations under the PFA and the Consent
Letters, subject to the satisfaction of the conditions precedent referred to in
paragraph 5 below.
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5.
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The
covenants, consents, extensions, terms and conditions set out in
paragraphs 7 to 16 below are subject to the conditions precedent
that:
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(a)
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a
binding underwriting agreement, and such other documentation as may be
required, (all in form and substance satisfactory to the Financiers,
acting reasonably) for minimum gross proceeds from the Unit Offering and
Flow Through Offering of CDN$50,000,000 (“Underwriting Documentation”) are
executed by the Borrower in relation to the Unit Offering and the Flow
Through Offering by no later than 12 October 2010;
and
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(b)
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the
date of the closing of the Unit Offering and the Flow Through Offering
(“Equity Close Date”) occurs on or before 19 October
2010.
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6.
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If
either of the conditions precedent set out in paragraph 5 is not satisfied
or waived, the covenants, consents, extensions, terms and conditions set
out in paragraphs 7 to 16 below will be inoperative and have no force and
effect, and the terms and conditions set out in the PFA and the previous
Consent Letters will apply. The provisions of this letter are without
prejudice to, and the Financiers otherwise reserve their rights under, the
PFA and the Consent Letters.
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Repayment
Schedule, hedging contracts and Working Capital
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7.
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On
the Business Day following the Equity Close Date, the Borrower will
deposit any amount that is to be set aside for Working Capital, which
shall be no more than CDN$5,000,000, into the Proceeds
Account.
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8.
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On
the Business Day following the Equity Close Date (or, to the extent of any
Additional Unit Proceeds, the Business Day following the closing of any
Increased Offering), the Borrower will pay to the Financiers an amount
equal to 50% of the balance of the Equity Proceeds after the deduction of
the amount deposited in the Proceeds Account for Working Capital, subject
to a minimum amount of CDN$18,000,000 (such amount being the “Principal
Repayment Amount”), to reduce the Principal Outstanding under the
Facility.
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9.
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For
illustrative purposes, assuming a Principal Repayment Amount equal to
US$17,500,000, the following second interim repayment schedule (“Second
Interim Repayment Schedule”) will apply, subject to the condition that the
Second Interim Repayment Schedule will be subject to review and amendment
by the Financiers and will be replaced by a final Repayment Schedule
(“Final Repayment Schedule”) that is determined by the Financiers and is
in a form and substance satisfactory to the Financiers once the Financiers
have approved an approved Cashflow Model (discussed further below). The
Financiers acknowledge that the Final Repayment Schedule will not require
any Principal Repayment Amounts before 31 March 20
II.
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3
Second
Interim Repayment Schedule
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Repayment Date
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Repayment Amount
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Business
Day following close of the Equity Offering
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US$ | 17,500,000.00 | ||
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30
June 2011
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US$ | 4,050,000.00 | ||
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30
September 2011
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US$ | 4,050,000.00 | ||
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31
December 2011
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US$ | 4,050,000.00 | ||
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31
March 2012
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US$ | 4,050,000.00 | ||
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30
June 2012
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US$ | 4,050,000.00 | ||
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30
September 2012
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US$ | 4,047,822.49 | ||
If the
Principal Repayment Amount is greater than US$17,500,000 (including because of
any Additional Unit Proceeds), any excess will be applied, at the discretion of
the Borrower: (i) to reduce a proportionate amount of each Repayment Amount
falling due on each Repayment Date; or (ii) against Repayment Amounts in inverse
order of maturity.
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10.
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Within
30 days from the Equity Close Date (or, to the extent of any Additional
Unit Proceeds, within 30 days following the closing of any Increased
Offering), the Borrower will apply the remaining Equity Proceeds, subject
to a minimum amount ofCDN$18,000,000, to reduce the liabilities currently
outstanding under the Financier Hedging Agreements, in a manner that is
satisfactory to the Financiers. During the period from the Equity Close
Date or the closing of the Increased Offering, as applicable, to the date
on which the remaining Equity Proceeds are used to reduce the liabilities
under the Financier Hedging Agreements, the balance of the Equity Proceeds
must be deposited in the Proceeds
Account.
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Extended
date for Deliverables
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11.
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The
date for delivery of certain of the Deliverables will be extended subject
to the terms and conditions set out
below:
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(a)
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on
or before 31 October 2010, the Borrower must
deliver:
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(i)
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a
LaMP;
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(ii)
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a
Cashflow Model;
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4
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(iii)
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a
Corporate Budget for the period 1 October 2010 to 31 December 2010
(“Interim Budget”); and
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(iv)
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a
Corporate Budget for the period 1 January 2011 to 31 December 2011 (“2011
Budget”),
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each of
which must be in a form and substance that has been approved by the board of the
Borrower. The Interim Budget must be divided into monthly periods and the
Cashflow Model, the LaMP and the 2011 Budget must be divided into monthly
periods for the period 1 October 2010 (or in the case of the 2011 Budget, 1
January 2011) to 31 December 2011 and quarterly periods thereafter;
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(b)
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each
of the Cash flow Model and the 2011 Budget must be in a form and substance
satisfactory to the Financiers, by 31 March
2011;
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(c)
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the
Borrower undertakes to work with the Financiers and the Financiers’
consultants, Xxxxxx Associates Pty Ltd (“Golders”) and Minesure Pty Ltd
(“Minesure”) (or such other consultants as may be appointed by the
Financiers from time to time) (together “Consultants”)
to:
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(i)
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allow
the Financiers and the Consultants to conduct a review of the LaMP, the
Cashflow Model, the Interim Budget and the 2011 Budget;
and
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(ii)
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ensure
that the Cashflow Model, and the 2011 Budget satisfy the requirements of
the Consent Letters and the PFA and are in a form and substance
satisfactory to the Financiers by no later than 31 March 2011. If there
are amendments to the Cashflow Model and/or the 2011 Budget to those
previously approved by the board of the Borrower, the Borrower will ensure
that the form of the Cashflow Model and the 2011 Budget that is approved
by the Financiers is also approved by the board of the
Borrower;
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(d)
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the
Financiers agree not to require the Borrower to deliver an updated
Resource Model at this stage, subject to the condition that the Borrower
undertakes to cooperate with the Financiers and the Consultants and
promptly provide such information as is requested by any of them from time
to time including, without limitation, in relation to the resource model
that has been delivered by the Borrower;
and
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(e)
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the
Borrower undertakes to demonstrate to the Agent that the Cashflow Model
that is ultimately approved by the Financiers (“Approved Cashflow Model”)
reflects that there are sufficient funds available to the Borrower, from
cashflows from the Project, from the Borrower’s project cash reserves, and
from other sources that are approved by the Financiers, to fund the
development, maintenance and operation of the Project and other corporate
working capital requirements, including the scheduled debt
repayments.
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5
Outstanding
hedging contracts and Financier Hedging Agreements
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12.
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As
part of the approval of the Cashflow Model contemplated above, the
Financiers will review and may require amendments to the Product hedge
delivery schedule after 31 March 2011 to reflect the Approved Cash flow
Model and LOMP.
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Exploration
expenditure
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13.
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For
the avoidance of doubt, and in accordance with clause 12.3 of the PFA
(“Proceeds Account”), prior to 31 March 2011, no withdrawals may be made
by the Borrower from the Proceeds Account for exploration expenditure
without the prior written approval of the Agent, acting on the
instructions of all Financiers.
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Standstill
End Date and amendments to the PFA
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14.
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The
Financiers agree to extend the Standstill End Date to 31 March
2011.
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15.
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The
Borrower and the Financiers agree that the following amendments are made
to the PFA:
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(a)
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clause
11.7(a) (“Determination is binding”) of the PFA shall be deleted and
replaced with the following:
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“(a)
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The technical assumptions,
economic assumptions and other terms of the Cashflow Model under this
clause 11 will be determined by the Agent (acting on the instructions of
the Financiers, acting reasonably, provided that the assumptions and other
terms must be satisfactory to each of the
Financiers.)”
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(b)
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clause
12.2(a) (“Debt Service Reserve Account”) of the PFA shall be amended by
deleting the reference to “30 September 2010” and replacing it with “31
March 2011”;
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(c)
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clause
12.4(b) (“Limits on Withdrawals”) shall be
deleted.
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16.
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The
Borrower has advised the Financiers that it will not satisfy the Project
Completion Test and otherwise achieve Project Completion on or before 30
September 2010. The Financiers agree not to enforce their rights with
respect to Project Completion and the Project Completion Test under
clauses 8.2(e) (“Project Completion”), 9.2(f) (“Project Completion Test”)
and 13.5(a)(3) (“Review Event”) before 30 September
2011.
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General
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17.
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In
the event that paragraphs 7 to 16 become operative, the Borrower and
Linear agree that a breach thereof shall constitute an Event of Default
for the purposes of the PFA.
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18.
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The
consents and agreements set forth above will be effective upon receipt by
the Agent of an executed counterpart copy of this letter, signed by the
Borrower and Linear, acknowledging and agreeing to the terms and
conditions outlined in this letter and payment or reimbursement of all of
the costs and expenses referred to in Section 20
below.
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6
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19.
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Save
as expressly set out in this letter, nothing in this letter shall be
deemed to:
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(a)
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be
an amendment to the terms of any Transaction Document, including the
Consent Letter, the First Consent Extension Letter; and the Second Consent
Extension Letter;
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(b)
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be
a waiver of or consent by the Agent or the Financiers to any breach or
potential breach (present or future) of any provision of the Transaction
Documents, including the Consent Letter and the First Consent Extension
Letter;
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(c)
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be
a waiver of an Event of Default, potential Event of Default or Review
Event;
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(d)
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prejudice
or adversely affect any right, power, authority, discretion or remedy
arising under any Transaction Document, including the Consent Letter and
the First Consent Extension Letter;
or
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(e)
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discharge,
release or otherwise affect any liability or obligation arising under any
Transaction Document, including the Consent Letter and the First Consent
Extension Letter,
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and the
Agent and the Financiers otherwise reserve all of their rights under the
Transaction Documents, including the Consent Letter and the First Consent
Extension Letter.
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20.
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Pursuant
to clause 16.4 (“Costs and Expenses”) of the PFA, the Borrower shall
reimburse the Financiers for the amount of: (a) all costs and expenses
(including legal fees of external counsel) incurred by the Financiers in
connection with this letter, (b) all other outstanding costs and expenses
of the Financiers’ external legal counsel, and (c) all outstanding costs,
fees and expenses of the Consultants and any independent engineers engaged
by the Financiers.
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21.
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This
letter shall constitute a Transaction Document for the purpose of the
PFA.
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22.
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This
letter constitutes the entire agreement and understanding of the parties
with respect to the subject matter of this letter, and supersedes all oral
communications and prior writings with respect
thereto.
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23.
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This
letter may be signed in any number of counterparts, and this has the same
effect as if the signatures on the counterparts were on a single copy of
this letter.
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24.
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This
letter shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada which are applicable in the
Province of Ontario.
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7
Please
indicate your acceptance of the terms and conditions contained in this letter by
countersigning the copy of this letter where indicated below.
[Signature
page to follow on next following page]
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SIGNED
FOR RMB RESOURCES INC.
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IN
ITS CAPACITY AS AGENT by Xxxx Xxxxxxx
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/s/ Xxxx Xxxxxxx
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Signature
of Xxxx Xxxxxxx
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SIGNED FOR RMB AUSTRALIA
HOLDINGS LIMITED, IN ITS CAPACITY AS FINANCIER by
Xxxxxxx Xxxxxxxxx |
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/s/ Xxxxxxx Xxxxxxxxx
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Signature
of Xxxxxxx Xxxxxxxxx
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SIGNED FOR MACQUARIE BANK
LIMITED,
IN ITS CAPACITY AS FINANCIER by its duly appointed attorneys under power of attorney dated October 27, 2009 |
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/s/ Xxxxx Xxxx
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Signature
of Attorney
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/s/ Xxxxxx XxXxxxxx
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Signature
of Attorney
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ACCEPTED
AND AGREED THIS 1st DAY OF
OCTOBER, 2010
9
