To: Brigus Gold Corp. And to: Brigus Gold ULC Each of: Suite 502, 2000 Barrington Street Halifax, Nova Scotia B3J 3K1 Canada Attention: Wade Dawe By Email: wdawe@lineargoldcorp.com August 3, 2010 RE: Extensions under Consent Letter (as defined below)...
And to:
Brigus Gold ULC
Each
of:
Suite
502, 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxx Xxxxxx
X0X
0X0
Xxxxxx
Attention: Xxxx
Xxxx
By Email:
xxxxx@xxxxxxxxxxxxxx.xxx
August 3,
2010
RE: Extensions
under Consent Letter (as defined below)
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”);
and
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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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Terms and
expressions defined in the PFA or the Consent Letter (or defined therein by
reference to another agreement) shall have the same meaning when used in this
letter unless otherwise defined. All references to the Borrower’s
undertakings referred to herein are to those undertakings set forth in the
Consent Letter.
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1.
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Extension with respect to
Consent Letter Deliverables
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(a)
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Pursuant
to the terms of the Consent Letter:
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(i)
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the
Borrower agreed to complete the Technical Review of the Project, in a form
and substance satisfactory to the Financiers, including (i) finalization
of a new resource model (the “Resource Model”) and
Life of Mine Plan (the “LOMP”); (ii)
determination of appropriate cut off grades for the open pit and
underground resources; and (iii) optimisation of the open pit and
underground mine planning, by no later than 31 May 2010 (paragraph (g) of Borrower’s
undertakings); and
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(ii)
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the
Borrower agreed to deliver a revised Cashflow Model to the Agent, for
review and approval by the Agent (acting on the instructions of the
Financiers), that otherwise satisfied the requirements of the PFA, by no
later than 31 May 2010 (paragraph (h) of Borrower’s
undertakings) (such Cashflow Model, together with the Technical
Review of the Project, the LOMP and the Resource Model, being the “Deliverables”).
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(b)
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The
Borrower provided each of these Deliverables to the Financiers prior to 30
April 2010. However, the Financiers determined that these
Deliverables were not in a form and substance satisfactory to the
Financiers or, where relevant, compliant with the Consent Letter and the
PFA. However, the Financiers acknowledge that these
Deliverables are works in progress and additional time will be beneficial
to continue the dialogue and technical effort between the Financiers and
the Borrower and each of the parties' respective consultants to allow for
completion of this work and presentation of the Deliverables in a form and
substance satisfactory to the Financiers and, where relevant, compliant
with the Consent Letter and the
PFA.
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(c)
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The
Borrower has requested, and the Financiers have agreed, to extend the date
for delivery of the Deliverables to 30 September 2010, subject to the
conditions that:
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(i)
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the
Borrower delivers on a weekly basis, and the Financiers are satisfied
with, evidence of the continued progress in relation to each of the
Deliverables;
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(ii)
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the
Borrower appoints an appropriately qualified geologist (which may be an
employee of the Borrower or an external consultant appointed by the
Borrower, who in either case must be satisfactory to the Financiers) who
will be responsible for the content and preparation of the Technical
Review, the LOMP and the Resource
Model;
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(iii)
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upon
delivery on or before 30 September 2010, the Deliverables are in a form
and substance satisfactory to the Financiers and, where relevant,
compliant with the Consent Letter (as amended by this letter) and the
terms, conditions and requirements of the
PFA;
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(iv)
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during
the period from the date of this letter to 30 September 2010, the Borrower
delivers on a weekly basis an update to the Financiers and the Financiers’
consultants, Xxxxxx Associates Pty Ltd., detailing the progress and the
steps that it is taking to complete the Technical Review and finalise the
preparation of the LOMP and the Resource Model so that upon delivery, the
Technical Review, the LOMP, the Resource Model and the Cashflow Model will
be in a form and substance satisfactory to the Financiers and appropriate
for the purposes of analysing the Project’s debt capacity;
and
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(v)
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on
or before 30 September 2010, the Borrower delivers a Corporate Budget that
satisfies the requirements of the PFA for the period 1 October 2010 to 31
December 2010.
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2.
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Repayment
Schedule and equity raising
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(a)
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Pursuant
to section 5(b) of the Consent Letter, the parties agreed to a new
Repayment Schedule (the “Consent Letter Repayment
Schedule”), which provided for, inter alia, the
following payments:
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Repayment
Date
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Repayment
Amount
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The
earlier of 30 September 2010 and the date on which the proceeds from any
one or more equity raisings following the Transaction Completion Date
equals US$10,000,000 (the “Scheduled $10m
Repayment”)
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US$10,000,000
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31
December 2010
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US$5,000,000
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31
March 2011 – 31 March 2013 with the Repayment Dates to be agreed between
the Borrower and the Agent by no later than 30 September 2010 to reflect
the Cashflow Model that is approved by the Agent. In the
absence of agreement between the Borrower and the Agent by 30 September
2010, the Secured Moneys shall be due and payable on 31 December
2010.
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US$35,000,000
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(b)
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The
Borrower has announced an equity financing at a price per share of
Cdn$1.40 with expected gross proceeds of between Cdn$12.0 and Cdn$14.0
million in a press release issued by the Borrower on July 16, 2010 (the
“Equity
Financing”). Notwithstanding the Equity Financing, the
Borrower has requested that the Financiers agree to an extension of the
Scheduled $10m Repayment, on the terms set out
below.
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(c)
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On
19 July 2010, the Borrower delivered an interim Cashflow Model (the “Interim Cashflow Model”)
to the Financiers. The Borrower has requested that the
Financiers agree that the following interim Repayment Schedule (the “Interim Repayment
Schedule”), which is based on the Interim Cashflow Model, replace
the Consent Letter Repayment Schedule until such time that a Repayment
Schedule, based on the Cashflow Model that has been delivered in
accordance with paragraph 1 above and approved by the Financiers (the
“Approved Cashflow
Model”), is available and can be used to determine a final
Repayment Schedule.
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Repayment
Date
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Repayment
Amount
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30
September 2010
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US$0
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31
December 2010
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US$5,000,000
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31
March 2011
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US$4,090,000
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30
June 2011
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US$4,090,000
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30
September 2011
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US$4,090,000
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31
December 2011
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US$4,090,000
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31
March 2012
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US$4,090,000
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30
June 2012
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US$4,090,000
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30
September 2012
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US$4,090,000
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31
December 2012
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US$4,090,000
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31
March 2013
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US$4,077,822.49
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(d)
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As
requested by the Borrower, the Financiers agree that the Consent Letter
Repayment Schedule be replaced by the Interim Repayment Schedule subject
to the terms and conditions set out
below:
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(i)
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the
Equity Financing is closed on or before 30 July 2010 with no material
adverse change to the expected price per share or gross proceeds to be
received from the Equity Financing;
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(ii)
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the
proceeds of the Equity Financing, net of fees payable to the underwriters
of the Equity Financing, must be deposited into the Proceeds Account of
the Borrower;
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(iii)
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the
Borrower delivers the Deliverables, including, the final Cashflow Model,
to the Financiers by 30 September 2010, as required by, and in accordance
with the conditions set out in paragraph 1
above;
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(iv)
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the
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 Approved Cashflow
Model is received and approved by the Financiers in accordance with
paragraph 1 above. The Final Repayment Schedule will be based
on the Approved Cashflow Model;
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(v)
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the
Financiers note that the Interim Cashflow
Model:
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(A)
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assumes
a gold price that is different from the assumed gold price that
the Lenders have approved in previous Cashflow Models in accordance with
clause 11 of the PFA; and
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(B)
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has
made technical assumptions that are different from the Financiers’ current
understanding of the Project. These differences will need to be
addressed to the Financiers’ satisfaction in the Technical Review with any
required changes being reflected in the Approved Cashflow Model;
and
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(vi)
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the
Borrower undertakes that, if the Approved Cashflow Model incorporates a
contemplated equity raising in order to ensure compliance with the
financial undertakings specified in clause 9.24 of the PFA, the Borrower
will use its best endeavours to raise additional equity and to pay the net
proceeds of such equity raising into the Proceeds Account as contemplated
by the Approved Cashflow Model.
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For the
avoidance of doubt, if any of these conditions are not met, the Consent Letter
Repayment Schedule will apply. The Financiers also note that, in
accordance with the terms of the Consent Letter, the Standstill End
Date will occur on 30 September 2010 and nothing in this letter amends the
Standstill End Date nor waives any of the Financiers’ rights upon the occurrence
of the Standstill End Date.
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3.
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Management of the Borrower and
Project Completion
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Further
to their obligations under the PFA and Consent Letter, and in particular
pursuant to Schedule 4 of the PFA, the Borrower undertakes to keep the
Financiers informed of anticipated changes in corporate and site management and
the proposed appointment of new personnel to management positions on an ongoing
basis in contemplation of achievement of Project Completion in accordance with
the requirements of the PFA and the Consent Letter.
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4.
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General
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(a)
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The
consents and agreements set forth in Sections 1 to 3 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.
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(b)
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Save
as expressly set out in this letter, nothing in this letter shall be
deemed to:
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(i)
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be
an amendment to the terms of any Transaction Document, including the
Consent Letter;
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(ii)
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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;
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(iii)
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be
a waiver of an Event of Default, potential Event of Default or Review
Event;
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(iv)
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prejudice
or adversely affect any right, power, authority, discretion or remedy
arising under any Transaction Document, including the Consent Letter;
or
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(v)
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discharge,
release or otherwise affect any liability or obligation arising under any
Transaction Document, including the Consent
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.
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(c)
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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 all
reasonable costs and expenses (including legal fees of external counsel)
incurred by the Financiers in connection with this
letter.
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(d)
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This
letter shall constitute a Transaction Document for the purpose of the
PFA.
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(e)
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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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(f)
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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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(g)
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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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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. IN ITS CAPACITY AS AGENT by Xxxx
Xxxxxxx
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/s/ Xxxx
Xxxxxxx
Signature
of Xxxx Xxxxxxx
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SIGNED FOR RMB
AUSTRALIA HOLDINGS LIMITED, IN ITS CAPACITY AS FINANCIER by Xxxx
Xxx
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/s/ Xxxx Xxx
Signature
of Xxxx Xxx
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SIGNED FOR MACQUARIE BANK
LIMITED, IN ITS CAPACITY AS FINANCIER by its duly appointed
attorneys under power of attorney dated _______________
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______________________________________
Signature
of Attorney
______________________________________
Signature
of Attorney
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ACCEPTED
AND AGREED THIS _____________, 2010
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By:
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/s/
Xxxx Xxxx
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Per:
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BRIGUS
GOLD ULC.
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By:
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/s/
Xxxx Xxxx
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Per:
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