*Not for Release in the United States*
Company Website:
http://www.goldreserveinc.com
SPOKANE, Wash. -- (Business Wire)
Gold Reserve Inc. (TSX.V:GRZ) (OTCQB:GDRZF) (“Gold Reserve” or the
“Company”) is pleased to announce an agreement in principle with its
largest noteholders representing 88% of its currently outstanding
convertible notes (“Modified Notes”) to issue up to US $12.3 million of
new convertible notes (“New Notes”) due December 31, 2018 and modify,
amend and extend the maturity date of its US $44 million outstanding
principal and accrued interest amount of previously modified notes (“Old
Notes”) from December 31, 2015 to December 31, 2018. The terms are
binding subject to TSX Venture Exchange approval and negotiation and
entry into definitive documents. The Company will issue the US $12.3
million New Notes with an original issue discount of 2.5% of the
principal amount and will also issue New Notes representing 2.5% of the
principal and interest amount to the current holders of the Modified
Notes being extended as a restructuring fee.
The New Notes and the Modified Notes (as amended from the date of
closing) (collectively the “Notes”) will bear interest at a rate of 11%
per year, which interest will be paid in kind quarterly and will accrue
and be payable in cash at maturity. The Notes will be convertible, at
the option of the holder, into 333.33 of Class A common shares per US
$1,000 (equivalent to a conversion price of US $3.00 per common share,
an 11% premium to the current price) at any time upon prior written
notice to the Company.
The Notes will be senior obligations of the Company, secured by all
assets of the Company and subject to certain other terms including
restrictions regarding the pledging of assets and incurrence of certain
capital expenditures or additional indebtedness without consent of
noteholders; and participation rights in future equity or debt
financing. The transaction is expected to be completed in September 2015.
Doug Belanger, President, stated, “We appreciate the continued support
of our shareholders and noteholders during the arbitration and now the
collection process. Extending the maturity of the notes and raising
additional funds will allow the Company to aggressively pursue the
collection process through to its full conclusion.”
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the meaning
of applicable U.S. federal securities laws and state Gold Reserve's and
its management's intentions, hopes, beliefs, expectations or predictions
for the future including without limitation statements with respect to
the proposed issuance of the New Notes, modification of the Old Notes,
and the arbitration proceedings. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that, while
considered reasonable by management at this time, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies.
We caution that such forward-looking statements involve known and
unknown risks, uncertainties and other risks that may cause the actual
outcomes, financial results, performance, or achievements of Gold
Reserve to be materially different from our estimated outcomes, future
results, performance, or achievements expressed or implied by those
forward-looking statements.
Numerous factors could cause actual results to differ materially from
those in the forward-looking statements, including without limitation,
the risk that the Company may not receive necessary regulatory approvals
for the issuance of the New Notes or modification of the Old Notes, the
risk that the Company and the current holders of the Modified Notes may
not be able to reach agreement on definitive documentation for the
issuance of the New Notes or modification of the Old Notes and that all
holders of the Old Notes may not consent to the modifications or
additional issuances described herein, requiring other or different
terms, and the timing of the amount of collection of the award, if any.
This list is not exhaustive of the factors that may affect any of
Gold Reserve's forward-looking statements. Investors are cautioned not
to put undue reliance on forward-looking statements. All subsequent
written and oral forward-looking statements attributable to Gold Reserve
or persons acting on its behalf are expressly qualified in their
entirety by this notice. Gold Reserve disclaims any intent or obligation
to update publicly or otherwise revise any forward-looking statements or
the foregoing list of assumptions or factors, whether as a result of new
information, future events or otherwise, subject to its disclosure
obligations under applicable rules promulgated by the SEC.
In addition to being subject to a number of assumptions,
forward-looking statements in this release involve known and unknown
risks, uncertainties and other factors that may cause actual results and
developments to be materially different from those expressed or implied
by such forward-looking statements, including those factors outlined in
the "Cautionary Statement Regarding Forward-Looking Statements" and
"Risks Factors" contained in Gold Reserve's filings with the Canadian
provincial securities regulatory authorities and the SEC, including Gold
Reserve's Annual Information Form and Annual Report on Form 40-F for the
year ended December 31, 2015, filed with the Canadian provincial
securities regulatory authorities and the SEC, respectively.
Further information regarding the Company can be located at www.goldreserveinc.com,
www.sec.gov
and www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150903006601/en/
Contacts:
Gold Reserve Inc.
President
A. Douglas Belanger,
509-623-1500
Fax: 509-623-1634
Source: Gold Reserve Inc.
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