UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: November 26, 2014
(Date of earliest event reported)
(Exact Name of Registrant as Specified in Charter)
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(State or Other Jurisdiction of Incorporation)
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001-33894
(Commission File Number)
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98-0459178
(IRS Employer Identification No.)
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Point at Inverness, Suite 280
8310 South Valley Highway
Englewood, Colorado
(Address of principal executive offices)
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80112
(Zip Code)
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Registrant’s telephone number, including area code: (720) 979-0900
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Definitive Material Agreement
On November 26, 2014, Midway Gold Corp.’s (the “Company or “our”) subsidiary MDW Pan LLP, as borrower (“MDW”) entered into an amendment (the “Amendment”) amending the credit agreement (the “Credit Agreement”) with Commonwealth Bank of Australia (“CBA”), as administrative agent, collateral agent and the initial lender.
The Amendment, among other things, amends the definitions of certain terms, updates the aggregate amount of the senior secured non‑revolving term credit facilities, updates the principal repayment dates and repayment amounts, updates and makes other clarifying amendments to the Credit Agreement.
The following description is a summary of the terms of the Amendment and is qualified in its entirety by reference to the text of the Amendment, which is filed as Exhibit 10.1 hereto.
Item 7.01. Regulation FD Disclosure.
On December 1, 2014 the Company issued the press release announcing that it has made an initial draw of $18 million on the project finance facility that was closed July 21, 2014 with CBA. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press releases attached hereto is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended. The information set forth in Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.
Item 9.01. Exhibits.
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Exhibit
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Description
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10.1
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Amendment, dated November 26, 2014
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99.1*
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Press Release, dated December 1, 2014
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*The exhibit relating to Item 7.01 is intended to be furnished to, not filed with, the SEC pursuant to Regulation FD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MIDWAY GOLD CORP.
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DATE: December 3, 2014
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By:
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/s/ Bradley J. Blacketor
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Bradley J. Blacketor
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
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Description
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10.1
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Amendment, dated November 26, 2014
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99.1*
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Press Release, dated December 1, 2014
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*The exhibit relating to Item 7.01 is intended to be furnished to, not filed with, the SEC pursuant to Regulation FD.
EXHIBIT 10.1
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Commonwealth Bank of Australia,
599 Lexington Avenue, 17th Floor
New York, NY 10022
Attn: Director, Project Finance
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Reference is made to that certain Credit Agreement, dated as of July 18, 2014 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”), among MDW Pan LLP, as Borrower, Commonwealth Bank of Australia, as Administrative Agent, Collateral Agent, Technical Agent and Initial Lender, and the other Lenders named therein from time to time. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Credit Agreement.
In accordance with Section 15.01 of the Credit Agreement, the Borrower hereby requests that the Lenders and the Administrative Agent evidence their approval and consent to the following by signing the signature pages for such parties attached hereto:
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(a) |
The second paragraph of the “Preliminary Statements” of the Credit Agreement is hereby amended by (i) replacing the reference to “U.S.$55,000,000” therein with a reference to “U.S.$53,000,000” and (ii) replacing the reference to “U.S.$45,000,000” therein with a reference to “U.S.$43,000,000”.
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(b) |
The definition of “Capex Reserve Amount” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
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““Capex Reserve Amount” means U.S.$0.” |
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(c) |
The definition of “Cash Sweep Amount” in Section 1.01 of the Credit Agreement is hereby amended by replacing the reference to “Section 14.04(d)(xi) and (xii)” therein with a reference to “Section 14.04(d)(xi) through (xiii)”.
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(d) |
The definition of “Commitment” in Section 1.01 of the Credit Agreement is hereby amended by (i) replacing the reference to “U.S.$55,000,000” therein with a reference to “U.S.$53,000,000” and (ii) replacing the reference to “U.S.$45,000,000” therein with a reference to “U.S.$43,000,000”.
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| Midway – Amendment Letter |
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(e) |
The definition of “Depositary Agent” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
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““Depositary Agent” means (a) with respect to the Proceeds Account, Wells Fargo Bank, National Association and (b) with respect to each other Depositary Account, The Bank of New York Mellon, in each case, as depositary bank under the applicable Depositary Agreement, or any successor depositary agent appointed pursuant to such Depositary Agreement or otherwise approved in writing by the Agents and the Lenders.” |
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(f) |
The definition of “Depositary Agreement” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
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““Depositary Agreement” means (a) with respect to the Proceeds Account, the Deposit Account Control Agreement, dated as of October 3, 2014, among the Borrower, the Collateral Agent and Wells Fargo Bank, National Association, as depositary bank and (b) with respect to each other Depositary Account, the Depositary Agreement, dated as of October 29, 2014, among the Borrower, the Administrative Agent, the Collateral Agent and The Bank of New York Mellon, as depositary bank.” |
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(g) |
The definition of “PFF Commitment” in Section 1.01 of the Credit Agreement is hereby amended by replacing the reference to “U.S.$45,000,000” therein with a reference to “U.S.$43,000,000”.
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(h) |
The definition of “Project Costs” in Section 1.01 of the Credit Agreement is hereby amended by deleting the proviso at the end thereof.
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(i) |
Clause (i) of the definition of “Risk Management Program” is hereby amended and restated in its entirety as follows:
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“(i) shall include (A) the Gold Price Protection Program and (B) an interest rate hedge permitted under clause (ii)(A) below representing 75% of the expected amount of PFF Loans to be borrowed by the Borrower under this Agreement and maturing after the Maturity Date and” |
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(j) |
Section 2.05(a) of the Credit Agreement is hereby amended by replacing the table set forth therein with the following table:
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Principal Repayment Date
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Repayment Amount (in U.S.$ millions)
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June 30, 2015
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1.00
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| Midway – Amendment Letter |
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September 30, 2015
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4.60
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December 31, 2015
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3.60
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March 31, 2016
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4.05
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June 30, 2016
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2.00
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September 30, 2016
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5.75
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December 31, 2016
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10.75
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March 31, 2017
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11.25
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(k) |
Section 4.02(b) of the Credit Agreement is hereby amended and restated in its entirety as follows:
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“The Risk Management Program (including the Gold Price Protection Program and the interest rate hedge described in clause (i)(B) of the definition of Risk Management Program) shall have been fully implemented, and the required hedge economic outcomes contained therein satisfied.” |
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(l) |
Section 4.04(a)(i) of the Credit Agreement is hereby amended by deleting the parenthetical therein.
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(m) |
Section 4.05(a)(viii) of the Credit Agreement is hereby amended and restated in its entirety as follows:
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“[Reserved]” |
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(n) |
Section 14.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
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“On or prior to the date hereof, the Borrower shall establish, and shall thereafter maintain, the following segregated Dollar-denominated collateral accounts with the applicable Depositary Agent for deposit of the Project Revenues and other moneys and proceeds: |
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(a) Account No. entitled “Proceeds Account” (the “Proceeds Account”); |
| Midway – Amendment Letter |
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(b) Account No. entitled “MDW Pan LLP – Operating Reserve Account” (the “Operating Reserve Account”); |
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(c) Account No. entitled “MDW Pan LLP – Capex Reserve Account” (the “Capex Reserve Account”); |
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(d) Account No. entitled “MDW Pan LLP – Compensation Account” (the “Compensation Account”); and |
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(e) Account No. entitled “MDW Pan LLP – Debt Service Reserve Account” (the “Debt Service Reserve Account”). |
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Notwithstanding the foregoing, the parties agree that no Event of Default or Prospective Event of Default shall occur as a result of the Borrower’s failure to maintain the Capex Reserve Account.” |
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(o) |
Section 14.04(d)(ix) of the Credit Agreement is hereby amended by replacing the reference to clause “(vii)” therein with a reference to clause “(viii)”.
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(p) |
Section 14.04(d) of the Credit Agreement is hereby amended by replacing clause (xiii) with the following:
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“(xiii) thirteenth, after the application of funds as provided in clause (i) through (xii) above, twenty-five percent (25%) of amounts remaining in the Proceeds Account shall be applied as a mandatory prepayment in accordance with Section 2.03(b); and |
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(xiv) fourteenth, after the application of funds as provided in clauses (i) through (xiii) above, solely to the extent that Restricted Payments would be permitted with respect to amounts remaining in the Proceeds Account pursuant to Section 11.01 and not more than once per Quarterly Period, the Borrower may direct the transfer of such remaining funds to the Distribution Account.” |
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(q) |
Section 14.08 of the Credit Agreement is hereby amended by deleting the language “, together with evidence showing that such funds to be transferred and remaining in the Capex Reserve Account are sufficient in aggregate, on a cost to complete basis, to meet the First Leach pad Expansion Costs” at the end thereof.
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(r) |
The second sentence of Section 14.12(a) of the Credit Agreement is hereby amended by adding the following language to the end thereof:
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“or such other account as the Administrative Agent and the Borrower may agree” |
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(s) |
Schedule I (Commitments, Pro Rata Share, Lending Offices) of the Credit Agreement is hereby replaced in its entirety with Schedule I attached hereto.
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(t) |
Schedule IV (Economic Completion Test and Agreed Test Protocols) of the Credit Agreement is hereby amended by adding the following language to the end thereof:
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| Midway – Amendment Letter |
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“(g) First Leach Pad Expansion: The First Leach Pad Expansion has been completed, in accordance with the Development Plan and Financial Model, inclusive of |
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(i) |
Site grading;
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(ii) |
HDPE liner installation, including welding, trenching and placement;
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(iii) |
overliner placement, including crushing, placement and grading; and
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(iv) |
piping, including leak detection and on-solution.
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The incremental leach pad space associated with the expansion is to be not less than 1,300,000 square feet, with a minimum leach pad capacity of 8 million tons based on 160 feet maximum stacking height.”
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(u) |
Paragraph 1 of Exhibit N-2 of the Credit Agreement is hereby amended by deleting the parenthetical therein.
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(v) |
Paragraph 7 of Exhibit O-2 of the Credit Agreement is hereby amended and restated in its entirety as follows:
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“[Reserved]” |
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2. |
Consents
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| In accordance with Section 15.01 of the Credit Agreement, the Borrower hereby requests that the Lenders and the Administrative Agent evidence their approval and consent to the following by signing the signature pages for such parties attached hereto: |
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(a) |
Within thirty (30) days following the occurrence of the Initial Funding Date, so long as no Event of Default or Prospective Event of Default has occurred and is continuing, the Borrower shall be permitted to make a one-time Restricted Payment from the Proceeds Account in an amount not to exceed U.S.$2,750,000.
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(b) |
Notwithstanding Sections 2.02(a), 4.03(g)(iv), 14.07 and 14.10 of the Credit Agreement, with respect to the final Borrowing under the Project Finance Facility, in addition to any other amounts permitted to be borrowed pursuant to the Credit Agreement, the Borrower shall be permitted to apply outstanding PFF Commitments to fund (i) the Operating Reserve Account with up to the amount necessary to cause amounts deposited in or credited to the Operating Reserve Account to equal the Operating Reserve Requirement and (ii) the Debt Service Reserve Account with up to the amount necessary to cause amounts deposited in or credited to the Debt Service Reserve Account to equal the Debt Service Reserve Requirement. Conforming changes to the last paragraph of the Loan
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| Midway – Amendment Letter |
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Notice, paragraph 8 of the officer’s certificate in the form of Exhibit M-1 to the Credit Agreement and paragraph 4 of the Independent Engineer’s certificate in the form of Exhibit M-2 to the Credit Agreement, in each case delivered with respect
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(c) |
The Borrower delivered to the Administrative Agent and the Technical Agent on November 26, 2014 an updated Financial Model under the file name “Pan Gold Project Base Case Financial Model v8” (the “Updated Financial Model”). The parties agree that the existing Development Plan shall be deemed to be updated to reflect the Updated Financial Model as well as the new mine plan and leach pad stacking plan delivered by the Borrower to the Administrative Agent and the Technical Agent on November 14, 2014 under the file names “Progress Memo Pit Design and Stacking Plan 13-Nov-2014.pdf” and “Pan Resources - vulcanpit 7 fixed (v7b).xlsx” (the Development Plan as so updated, the “Updated Development Plan”). The Borrower hereby certifies that the Updated Development Plan and the Updated Financial Model (i) were prepared in good faith by the Borrower, (ii) are based on assumptions that are consistent with the requirements of the Transaction Documents, the Agreement Approvals, the Project Approvals and Applicable Law and that the Borrower considers to be reasonable in light of the conditions existing as of the delivery of the Update Development Plan and the Updated Financial Model and (iii) represent the Borrower’s best estimate of the information set forth therein as of the date of such delivery. Solely with respect to the Updated Development Plan and the Updated Financial Model referenced herein, the Lenders hereby consent to the foregoing certification being provided in lieu of the Officer’s Certificates contemplated by Sections 9.01(d)(i) and 9.01(e)(i) of the Credit Agreement and approve such Updated Development Plan and Updated Financial Model. |
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3. |
Miscellaneous
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| This letter shall become effective as of the date first written above only upon (a) receipt by the Borrower and the Administrative Agent of (i) counterparts of this letter executed by the Borrower, the Lenders and the Administrative Agent and (ii) the Consent and Reaffirmation attached hereto executed by each of the Guarantors, Guarantor Equity Pledgors and Equity Pledgors and (b) payment of the first installment of the Amendment Fee described below. |
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| In connection with this letter, the Borrower shall pay or cause to be paid to the Administrative Agent an amendment fee equal to 1.00% of the aggregate Commitment as of the date hereof (after giving effect to this Amendment) (the “Amendment Fee”). The Amendment Fee shall become due and payable in two installments, with 75% of the Amendment Fee becoming due on the Initial Funding Date and 25% of the Amendment Fee becoming due on the initial Principal Repayment Date. The Borrower agrees that, once paid, the Amendment Fee (or any portion thereof) will not be refundable under any circumstances. The Amendment Fee will be paid in immediately available funds, shall not be subject to reduction by way of set-off or counterclaim, and may be shared among the Lenders and the Agents (and their respective affiliates) as the Administrative Agent may determine in its sole discretion. |
| Midway – Amendment Letter |
| Upon the effectiveness of this letter, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as in effect after giving effect to this letter. |
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| The Credit Agreement and each of the other Loan Documents are and shall continue to be in full force and effect and, except as otherwise waived in accordance with the terms hereof, are hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this letter shall not, except as expressly provided herein, constitute a waiver of any provision of any of the Loan Documents. |
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| In case any provision herein or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. |
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| This letter may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this letter by electronic means shall be effective as delivery of a manually executed counterpart of this letter. |
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| This letter shall be governed by, and construed in accordance with, the law of the State of New York. |
[Signature pages follow]
| Midway – Amendment Letter |
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MDW PAN LLP, as Borrower
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By: MDW Pan Holding Corp., its Managing Partne |
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By: |
_________________________________ |
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Name: |
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Title: |
| Midway – Amendment Letter |
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COMMONWEALTH BANK OF AUSTRALIA, as Administrative Agent and Lender
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By: |
_________________________________ |
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Name: |
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| Midway – Amendment Letter |
EXHIBIT 99.1
MIDWAY RECEIVES FIRST BANK FUNDS FOR PAN GOLD PROJECT
MINING OPERATIONS CONTINUE TO RAMP UP
DENVER, CO – December 1, 2014 – Midway Gold Corp. (TSX and NYSE-MKT: MDW) (the “Company” or “Midway”) today announces that it has made an initial draw of $18 million on the project finance facility that was closed July 21, 2014 with Commonwealth Bank of Australia (“CBA”). The receipts will be used to fund construction obligations and mining operations at the Pan Gold Mine in eastern Nevada. Pan is in the late stages of construction with the first gold pour currently scheduled for late January 2015.
Midway’s President and CEO, Ken Brunk, stated, “I would like to express our thanks to CBA and our shareholders for placing their faith in the team here at Midway. That faith, expressed through the placement of debt and equity for the timely completion of Pan will enable Midway Gold to enter the realm of gold producers in Nevada at a time when the ability to raise either debt or equity for mining projects is a serious industry challenge.
The total capital expenditure for Pan construction is estimated at $76 million. We have spent approximately $55 million to date on construction as of November 30. We anticipate spending an additional $21 million for completion of construction and an additional $8 million for mining operations and other working capital items, net of revenue credits, until the project is expected to generate cash flow in March 2015. We have experienced significant reductions in initial capital requirements by eliminating a Midway-owned mining fleet, employing run of mine leaching at South Pan and by diligent cost reduction efforts at the project level as well as at the corporate level. We have accomplished these items while still progressing Pan to production and advancing our second project, Gold Rock, through the permitting process.
Recent updates to our leach pad-stacking plan have resulted in a slightly lower working capital requirement for the project in 2015. The project finance facility has therefore been reduced from $45 million to $43 million while the $10 million cost overrun facility will remain in place to fund any cost overruns during construction and start-up of operations.
Our mining contractor at Pan began mining activities in September and is currently building up to a target mining rate of 60,000 tons per day (ore and waste). We expect to begin irrigation of the leach pad in mid-December to achieve our target for a late January gold pour. We believe we are positioned for an exciting 2015 as Midway becomes Nevada’s next gold producer.”
| December 1, 2014 |
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About Midway Gold Corp.
Midway Gold Corp. is a precious metals company with a vision to explore, design, build and operate gold mines in a manner accountable to all stakeholders while assuring return on shareholder investments.
Midway Gold Corp.
Jaime Wells, 720-979-0900
Investor Relations
jwells@midwaygold.com
www.midwaygold.com
Neither the TSX Exchange, its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) nor the NYSE MKT accepts responsibility for the adequacy or accuracy of this release.
This press release contains forward-looking statements about the Company and its business. Forward looking statements are statements that are not historical facts and include, but are not limited to, statements about the Company's intended work plans, timing of gold pour, anticipated gold production, anticipated reductions in future costs and capital needs, cost to complete construction of the Pan Mine, targeted mining rates, schedule for beginning leach-pad irrigation, milestones, construction schedule, operational and other statements, estimates or expectations. Forward-looking statements are typically identified by words such as: “may”, “should”, “plan”, “believe”, “predict”, “expect”, “anticipate”, “intend”, “estimate”, postulate”, “target” and similar expressions or the negative of such expressions or which by their nature refer to future events. The forward-looking statements in this press release are subject to various risks, uncertainties and other factors that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by forward looking statements. There can be no assurances that the conditions precedent to make additional draws on the project debt package will be met or we will make additional draws on the project debt package even if we complete the conditions precedent. Other risks, uncertainties and factors include, without limitation, risks related to the timing and completion of the Company's intended work plans, potential delay of material deliveries, ability to meet debt covenants and obligations, risks related to fluctuations in gold prices; uncertainties related to raising financing in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold resources and reserves; ability to meet loan and financing covenants in the future; the possibility that required permits may not be obtained on a timely manner or at all; the possibility that capital and operating costs may be higher than currently estimated and may preclude commercial development or render operations uneconomic; the possibility that the estimated recovery rates may not be achieved; risk of accidents, equipment breakdowns and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; changes in interest and currency exchanges rates; local and community impacts and issues; environmental costs and risks; and other factors identified in the Company's SEC filings and its filings with Canadian securities regulatory authorities. Forward-looking statements are based on the beliefs, opinions and expectations of the Company's management at the time they are made, and other than as required by applicable securities laws, the Company does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances, should change. Although the Company believes that such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.