Tuesday, July 19, 2016

Gran Colombia produces 38,229 oz Au in Q2

2016-07-19 08:05 ET - News Release

Mr. Mike Davies reports
GRAN COLOMBIA GOLD ANNOUNCES TSX APPROVAL OF NORMAL COURSE ISSUER BIDS FOR ITS 2018 AND 2020 DEBENTURES; PROVIDES MID-YEAR PRODUCTION UPDATE AND Q2 2016 RESULTS WEBCAST DETAILS
Gran Colombia Gold Corp. has received approval from the Toronto Stock Exchange to commence normal course issuer bids for its senior unsecured convertible debentures due 2018 and its senior secured convertible debentures due 2020. The 2018 debentures and 2020 debentures currently trade on the TSX under the trading symbols GCM.DB.U and GCM.DB.V, respectively.

Under the terms of the bids the company will have the right to purchase for cancellation up to a maximum of $6,633,471 (U.S.) aggregate principal amount of 2018 debentures and a maximum of $9,629,597 (U.S.) aggregate principal amount of 2020 debentures through the facilities of the TSX or alternative Canadian trading systems. This amount represents approximately 10 per cent of the public float of the 2018 debentures and 2020 debentures, respectively, issued and outstanding as of July 11, 2016, determined in accordance with the applicable rules of the TSX. As of the date hereof, the aggregate principal amount issued and outstanding 2018 debentures is $63,742,176 (U.S.) and 2020 debentures is $103,294,350 (U.S.).

Management of the company will determine the actual number of 2018 debentures and 2020 debentures that may be purchased and the timing of any such purchases, subject to compliance with applicable TSX rules. Daily purchases will be limited to $17,154 (U.S.) principal amount of 2018 debentures and $12,279 (U.S.) principal amount of 2020 debentures, other than block purchase exceptions. Purchases made pursuant to the bids will be made on the open market through the facilities of the TSX or other designated exchanges and published markets in Canada, and the price that the company will pay for any such debentures will be the market price at the time of the acquisition. The company will not purchase debentures when the market price per $100 (U.S.) aggregate principal amount of debentures exceeds $100 (U.S.). The company is proposing to commence the bid on July 21, 2016, and have it remain open until the earlier of July 20, 2017, or the date on which the company has purchased the maximum number of debentures permitted under each bid. The company has not purchased any 2018 debentures or 2020 debentures during the previous 12 months.

Under the terms of the indenture governing each of the debentures, and as further described in such documents, the company is required to set aside certain amounts of its excess free cash for repayment, repurchase or redemption of the debentures. In accordance with each indenture, the company is entitled and intends to use such funds for purchases of debentures through the normal course issuer bids. The company intends to make the bids because it believes: that the 2018 debentures and 2020 debentures may be undervalued from time to time in relation to its current and future business prospects; that the purchase of debentures though the bids is the best use of any excess free cash accumulated as per the terms of the indentures governing each of the debentures; and that debentures may become available during the period of the bids at prices that would make the purchase of debentures for cancellation an appropriate use of available funds and in the best interests of the company and its shareholders.

Production update
The company also announced today that it produced a total of 38,229 ounces of gold in the second quarter of 2016, up 21 per cent from the first quarter of this year and up 34 per cent from the second quarter a year ago. This brings the total production for the first half of 2016 to 69,718 ounces of gold, up 33 per cent over the first half of 2015. The company remains on track with its production guidance for 2016 of a total of 120,000 to 138,000 ounces for the full year.

At the Segovia operations, second quarter 2016 gold production totalled 31,884 ounces, up 23 per cent from the first quarter of 2016 and up 41 per cent from the second quarter a year ago. Gran Colombia processed an average of 771 tonnes per day with head grades averaging 13.8 grams per tonne at Segovia in the second quarter of 2016, an improvement from 730 tpd at an average head grade of 12.9 g/t in the first quarter of 2016 and 534 tpd at head grades averaging 15.5 g/t in the second quarter a year ago. Improved mill recovery was also a factor in the increased gold production in the second quarter of 2016. For the first half of 2016, gold production at the Segovia operations totalled 57,883 ounces, up 41 per cent from the first half last year. Gran Colombia expects to produce a total of 96,000 to 110,000 at its Segovia operations for the full year 2016.

At the Marmato operations, tonnes processed increased by 19 per cent in the second quarter of 2016, compared with the first quarter this year, to 987 tpd with head grades averaging 2.6 g/t. This resulted in gold production of 6,345 ounces in the second quarter of 2016, up 16 per cent from the first quarter of 2016 and up 7 per cent from the second quarter a year ago. For the first half of 2016, gold production at the Marmato operations totalled 11,835 ounces, up 4 per cent from the first half last year. Gran Colombia expects to produce a total of 24,000 to 28,000 at its Marmato operations for the full year 2016.

Second quarter 2016 results webcast
The company announced today that it will release its financial results for the second quarter of 2016 after market close on Thursday, Aug. 11, 2016, and will host a conference call and webcast on Friday, Aug. 12, 2016, at 9:30 a.m. Eastern Time to discuss the results.
all-in details are as follows:
Toronto and international:  1-514-841-2157
North America toll-free:   1-866-215-5508
Colombia toll-free:  01-800-9-156-924
Conference ID:   42439708
A replay of the webcast will be available at the company's website from Friday, Aug. 12, 2016, until Sunday, Sept. 11, 2016.
We seek Safe Harbor.

Tuesday, July 12, 2016

Lightstream Announces Proposed Recapitalization Transaction


CALGARY, ALBERTA--(Marketwired - July 12, 2016) - Lightstream Resources Ltd. (the "Company" or "Lightstream") (TSX:LTS) announces that, as a result of our previously announced discussions with an ad hoc committee (the "Ad Hoc Committee") of the holders (the "Secured Noteholders") of the Company's US$650 million 9.875% second lien secured notes due June 15, 2019 (the "Secured Notes"), the Company has entered into a restructuring support agreement (the "Support Agreement") with members of the Ad Hoc Committee holding approximately 91.5% of the Secured Notes in respect of a proposed recapitalization (the "Recapitalization") of the Company's Secured Notes, the Company's US$254 million of 8.625% unsecured notes due February 1, 2020 (the "Unsecured Notes"), the Company's common shares (the "Common Shares") and the Company's revolving credit facility (the "Revolving Facility"). The proposed Recapitalization will reduce the Company's overall debt by approximately US$904 million (approximately CDN$1.175 billion) in principal and reduce our cash interest payments by over US$86.1 million (approximately CDN$112 million) per year.

The proposed Recapitalization is intended to be implemented by way of a corporate plan of arrangement (the "CBCA Plan Transaction") under the Canada Business Corporations Act (the "CBCA"). In connection with the proposed CBCA Plan Transaction, the Company intends to commence proceedings under the CBCA (the "CBCA Proceedings") before the Court of Queen's Bench of Alberta (the "Court") tomorrow, July 13, 2016. As part of the CBCA Proceedings, the Company will be seeking a preliminary interim order (the "Preliminary Interim Order") from the Court. The Preliminary Interim Order being sought by the Company will contain a stay prohibiting any person, including the Secured Noteholders and holders of the Unsecured Notes (the "Unsecured Noteholders"), other than the lenders under the Revolving Facility (the "Lenders"), from terminating, making any demand, accelerating, amending or declaring in default or taking any enforcement steps under any contract or other agreement to which the Company is a party. The Company has also entered into a separate forbearance agreement with the Lenders in connection with the Revolving Facility (the "Forbearance Agreement"), as described in further detail below, and, as such, the Company will not be seeking a stay in respect of the Lenders under the Preliminary Interim Order. Lightstream intends to continue to operate our business and satisfy our obligations to our service providers, suppliers, contractors and employees in the ordinary course of business as we pursue completion of the Recapitalization.

The Preliminary Interim Order sought by the Company will seek authorization to return to the Court on or before August 5, 2016 to seek a further order in the CBCA Proceedings (the "Interim Order Application") authorizing the Company to call, hold and conduct the required special meetings (the "Special Meetings") of the Secured Noteholders, the Unsecured Noteholders and the holders of Common Shares (the "Shareholders") to consider and vote on the CBCA Plan Transaction.

Lightstream and the Ad Hoc Committee are continuing to negotiate and finalize the terms of the proposed CBCA Plan Transaction and are working to finalize the documentation necessary to implement the proposed Recapitalization, including the CBCA plan of arrangement. The precise terms of the CBCA Plan Transaction, further details of which are set forth below, will be fully disclosed as part of the Interim Order Application and in the management information circular that will be prepared and delivered to Secured Noteholders, Unsecured Noteholders and Shareholders in connection with the Special Meetings. The Company will issue a further press release when the exact record date and meeting date for such Special Meetings have been determined. If all requisite approvals are obtained, the CBCA Plan Transaction will bind all Secured Noteholders, Unsecured Noteholders and Shareholders.

The completion of the Recapitalization is subject to a number of conditions, including that all required stakeholder, third-party, regulatory, Court and stock exchange approvals, consents or waivers must have been received (or, in the case of waiting or suspensory periods, such waiting or suspensory periods shall have expired or terminated) and, in the event that the Recapitalization proceeds by way of the CBCA Plan Transaction, Lightstream must have entered into an additional forbearance agreement with our Lenders, replaced the Revolving Facility with a new credit facility and, upon the completion of the CBCA Plan Transaction, the Lightstream board of directors must be constituted in a manner acceptable to the Ad Hoc Committee.

In the event that the requisite approvals in respect of the CBCA Plan Transaction are not obtained or the Company is otherwise unable to complete the CBCA Plan Transaction, the Company has agreed to pursue the Recapitalization through a sale transaction (the "CCAA Sale Transaction") that will be implemented through proceedings commenced under the Companies' Creditors Arrangement Act (the "CCAA"), further details of which are set forth below.

Should the CBCA Plan Transaction ultimately not proceed, and in order to ensure that the Company is able to implement the CCAA Sale Transaction in a timely fashion, the Company will initiate a sale and investment solicitation process ("SISP") on July 13, 2016 which is intended to generate interest in and potentially divest the business and/or the assets of the Company, with the goal of maximizing value for all stakeholders of the Company and identifying the best available transaction in the event that the CBCA Plan Transaction does not proceed. TD Securities Inc. has been engaged by Lightstream to manage the SISP.

As previously announced on June 14, 2016, Lightstream determined that it would not make the interest payment in the amount of US$32.1 million (approximately CDN$41.7 million) on the Secured Notes on June 15, 2016. Under the indenture governing the Secured Notes (the "Secured Indenture"), Lightstream had a 30-day grace period to make such payment. If the Company fails to make the required interest payment by July 15, 2016, there will be an event of default under the Secured Indenture, which will in turn cause a cross default under the Revolving Facility and the indenture governing the Unsecured Notes (the "Unsecured Indenture"). The commencement of the CBCA Proceedings is also a cross default under the Revolving Facility and a cross default under the Unsecured Indenture. Upon the occurrence of a cross default under the Revolving Facility, all obligations owing under the Revolving Facility, together with unpaid interest accrued thereon will become immediately due and payable. Lightstream has determined that it will not make the requisite interest payment on the Secured Notes and therefore the Company will be in default under its Revolving Facility, Secured Indenture and Unsecured Indenture on July 15, 2016.

As noted above, if the Preliminary Interim Order being requested is granted by the Court, the Secured Noteholders and Unsecured Noteholders will be stayed under the Preliminary Interim Order in connection with such defaults but the Lenders under the Revolving Facility are not expected to be subject to the stay. Instead, the Company (along with certain of its subsidiaries) has entered into the Forbearance Agreement with The Toronto-Dominion Bank, as Administrative Agent and other Lenders under the Revolving Facility. Under the terms of the Forbearance Agreement, among other things, the Lenders have agreed, subject to customary conditions, to forbear from exercising their enforcement rights and remedies arising on account of the cross defaults until July 28, 2016, including in respect of the Company's hedging liabilities. The Company will work toward entering into a second forbearance agreement with the Lenders on or before July 28, 2016. The Company expects that the second forbearance of the Lenders would be subject to a number of conditions including that Lightstream would diligently advance the CBCA Plan Transaction and the SISP and obtain commitments for a new credit facility to be in place upon the completion of the CBCA Plan or the CCAA Sale Transaction, as applicable.

The Company has cash on hand, currently in excess of $26.4 million, and monthly oil and gas sales revenue which averaged $26.7 million per month for the previous two months. Lightstream intends to continue to operate our business and satisfy our obligations to our service providers, suppliers, contractors and employees in the ordinary course of business as we pursue the completion of the Recapitalization.

Additional Details Respecting the Proposed Recapitalization
As noted above, the parties are continuing to negotiate and finalize the more detailed terms of the proposed Recapitalization and are working to finalize the documentation necessary to implement the proposed Recapitalization. However, the features of the proposed CBCA Plan Transaction are expected to include the following key elements:
  • prior to the CBCA Plan Transaction, the Company will seek to continue as a CBCA company;
  • the Secured Noteholders, Unsecured Noteholders and Shareholders will each be placed in their own voting class for the purposes of considering and voting on the proposed CBCA Plan Transaction;
  • Lightstream's Shareholder Rights Plan will be terminated and all rights thereunder will be cancelled and extinguished;
  • on implementation of the proposed CBCA Plan Transaction, the capital structure of the Company will be as follows:
    • the existing Common Shares will be consolidated and new Common Shares will be issued, with the result that approximately 100 million Common Shares will be outstanding,
    • existing Shareholders will hold a total of 2.25% of the then-outstanding Common Shares and existing Shareholders will also receive Series 2 warrants equal to 7.75% of the total number of issued Common Shares (the Series 2 warrants will be exercisable for a period of five years following the effective date of the CBCA Plan Transaction and have a sliding scale exercise price between CDN$12.88 and CDN$14.96),
    • the Secured Noteholders will hold a total of 95% of the then-outstanding Common Shares in full and final satisfaction of their Secured Notes and claims in connection therewith,
    • the Unsecured Noteholders will hold a total of 2.75% of the then-outstanding Common Shares in addition to Series 1 warrants equal to 5% of the total number of issued Common Shares (the Series 1 warrants will be exercisable for a period of five years following the effective date of the CBCA Plan Transaction and have a sliding scale exercise price between CDN$10.25 and CDN$11.77), in full and final satisfaction of their Unsecured Notes and claims in connection therewith,
    • no fractional Common shares or warrants will be issued and any fractional Common Shares or warrants that would have been issuable shall be rounded down to the nearest whole number, and
    • the Company will endeavour to maintain the listing of its Common Shares on the Toronto Stock Exchange;
  • the Revolving Facility will be replaced with a new credit facility;
  • all incentive shares and deferred compensation shares under Lightstream's employee incentive plans will be adjusted to reflect the capital reorganization contemplated by the CBCA Plan Transaction and will have a maximum term of six months following completion of the Recapitalization;
  • all outstanding stock options will be repurchased for nominal consideration or otherwise be terminated;
  • Lightstream will amalgamate with our wholly owned subsidiary and continue to carry on business as a CBCA company;
  • following implementation of the proposed CBCA Plan Transaction, the ownership percentages in the capital structure of Lightstream will be subject to post-implementation dilution to the extent that any Series 1 warrants, Series 2 warrants or existing options, incentive shares and deferred compensation shares existing under the Company's equity based compensation plans are exercised, or any Common Shares are issued pursuant to the Company's employee incentive plans;
  • the board of directors of reorganized Lightstream shall consist of (i) the current Chief Executive Officer, (ii) one or more existing directors acceptable to the Ad Hoc Committee and (iii) other new individuals acceptable to the Ad Hoc Committee;
  • the completion of the CBCA Transaction is expected to result in the creation of new "control persons" (as such term is defined in applicable securities laws) of the Company;
  • all priority claims, including, without limitation, taxes payable and unpaid wages, will remain unaffected; and
  • all trade debt will remain unaffected.
In the event that the CBCA Plan Transaction is not approved or is otherwise unable to be completed, as noted above, the Company has agreed to undertake a CCAA Sale Transaction. As part of the proceedings under the CCAA, the members of the Ad Hoc Committee will make (or direct) a credit bid (the "Secured Credit Bid") for the full amount of the claims outstanding in respect of the Secured Notes, which Secured Credit Bid may serve as a stalking horse transaction in the SISP. In the event that the Secured Credit Bid is the successful bid, the entity through which the Secured Credit Bid is completed will commit to replicate any consideration that was offered to the Unsecured Noteholders or Shareholders in the CBCA Plan Transaction as part of the Secured Credit Bid, provided that the consideration will only be available to the Unsecured Noteholders or Shareholders if they, as a class, approved the CBCA Plan Transaction at the requisite levels at the meetings held by Lightstream to approve the CBCA Plan Transaction. In the event that the Secured Credit Bid is not the successful bid that is approved in the proceedings under the CCAA and the Secured Noteholders are repaid the full amount of their claims in respect of the Secured Notes, then upon receipt of such repayment, the members of the Ad Hoc Committee have agreed to make CDN$20 million available to the Shareholders provided that the Shareholders approved the CBCA Plan Transaction at the requisite level at the meeting held by Lightstream to approve the CBCA Plan Transaction.

Annual General Meeting
With a view to reducing the expense and inconvenience to Shareholders associated with holding two separate meetings, Lightstream sought and received an extension from the TSX to postpone our Annual General Meeting to as late as September 30, 2016 in order to accommodate the Shareholder vote required for the Recapitalization. The Company will issue a press release when the exact record date and meeting date have been determined.

Information Provided to the Ad Hoc Committee
As part of our negotiations with the Ad Hoc Committee, and pursuant to confidentiality agreements, the Company provided Secured Noteholders who were parties to such agreements, with certain internal financial projections regarding the Company, including internal production forecasts, budgeting scenarios and reserves sensitivity analyses (the "Restructuring Information"). A copy of the Restructuring Information has been posted on the Company's website at www.lightstreamresources.com. This Restructuring Information was prepared by management of the Company as at May 31, 2016, represents a small sample of a number of possible scenarios and is subject to interpretation as well as a number of significant assumptions. As a result, readers are cautioned that the Restructuring Information does not necessarily reflect the Company's current circumstances or the current estimates or projections of management. Neither the board of directors of the Company nor any of its committees approved the projections or analyses contained in the Restructuring Information.

The Company does not, as a matter of course, publish reserves sensitivity analyses or our budgets or publish internal projections or forecasts of our anticipated financial position, expenditures, cash balances or cash flows. The Restructuring Information was prepared for the purposes of negotiating the transactions contemplated in the Support Agreement and was not prepared with a view to being disclosed publicly. It has been posted to the Company's website only because such information was made available to certain members of the Ad Hoc Committee and is not appropriate for any other purpose. Therefore, the Restructuring Information should not be regarded as an indication that Lightstream or any other person considered, or now considers, this information to be necessarily predictive of actual future results, and does not constitute an admission or representation by any person that such information is material, or that the expectations, beliefs, opinions, and assumptions that underlie such information remain the same as of the date of this press release. Given the highly speculative nature of the information provided and the assumptions underlying it, as well as the fact that the information represents only one of a number of possible scenarios, Lightstream does not view the Restructuring Information provided to the members of the Ad Hoc Committee and as subsequently posted to the Lightstream website as material. The Restructuring Information may be incomplete, may no longer be accurate, is subject to interpretation and should not be relied upon by any person in making an investment decision or for any other purpose.

In all cases, the Restructuring Information is also subject to significant risks, including the risk factors set forth in the Company's annual information form for the year-ended December 31, 2015 which is filed under the Company's profile on SEDAR at www.sedar.com (the "AIF") under the heading "Risk Factors" and under the headings "Risks and uncertainties" and "Sensitivities" in the Company's management's discussion and analysis for the year-ended December 31, 2015 and for the three-months ended March 31, 2016 which are also filed on SEDAR.

In addition to the foregoing, the financial information provided in the Restructuring Information was not prepared in accordance with International Financial Reporting Standards and is therefore unlikely to be comparable to similar information presented by other issuers. Neither the independent auditor of the Company nor any other independent accountant has examined the Restructuring Information nor expressed any opinion or other form of assurance on such Restructuring Information. For financial information respecting the Company, reference should be made to the Company's annual audited financial statements for the year-ended December 31, 2015 and accompanying management's discussion and analysis and its interim financial statements for the three-months ended March 31, 2016 and accompanying management's discussion and analysis, as filed on SEDAR. Further, as the Restructuring Information was not prepared with a view to being disclosed publicly, the internal production forecasts and reserves sensitivity analyses provided in the Restructuring Information was not prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities or the related staff notices of the Canadian Securities Administrators and therefore should not be relied upon by investors. Information respecting the Company's reserves and resources is available in the Company's AIF under the headings "Statement of Reserves Data" and "Additional Information Relating to Reserves Data".

With respect to the Restructuring Information and subject to applicable securities laws, the Company does not intend to or anticipate that we will, and we further disclaim any obligation to furnish updated projections, sensitivity analyses or forecasts or similar forward looking information to holders of securities issued by the Company or to include such information in documents required to be filed with the applicable Canadian Securities Administrators or otherwise make such information publicly available.

Lightstream has retained TD Securities Inc. and Evercore Capital L.L.C. as our financial advisors, Lightstream's Board retained RBC Capital Markets as their independent financial advisor, and the Ad Hoc Committee retained BMO Capital Markets as its financial advisor for the recapitalization plan.
This press release provides only summary information in respect of the proposed Recapitalization, including only summary information relating to the terms of the Support Agreement, the Forbearance Agreement and the Preliminary Interim Order. Readers are urged to consult the full text of the Support Agreement, Forbearance Agreement and Order for further important information. Copies of these documents will be filed under the Company's profile on SEDAR at www.sedar.com and posted on the Company's website at www.lightstreamresources.com.
Lightstream Resources Ltd. is an oil and gas exploration and production company focused on light oil in the Bakken and Cardium resource plays. We are committed to delivering industry leading operating netbacks, strong cash flows and consistent operating results through leading edge technology applied to a multi-year inventory of existing and emerging resource play opportunities. Our long-term strategy is to efficiently develop our assets and deliver an attractive dividend yield.
Forward Looking Information. Certain information provided in this press release constitutes forward-looking information (within the meaning of applicable Canadian securities laws). Specifically, this press release contains forward-looking information in respect of the Recapitalization and the matters related thereto including the anticipated timing of certain events, including the timing, form, substance and receipt of the Preliminary Interim Order (including any stay proceedings) and the timing of the Interim Order Application, the second forbearance agreement, the negotiation of the final terms thereof, the commencement of the SISP and the ability of Lightstream to continue to operate its business in the ordinary course while pursuing the Recapitalization. The forward-looking statements are based on information currently available as well as certain expectations and assumptions concerning anticipated financial performance, business prospects and general market conditions. Although Lightstream believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Lightstream can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks, which risks include, without limitation that the Company may not be able to complete the Recapitalization on the timeline or on the terms currently contemplated or at all, the Recapitalization may have an effect on the Company other than what is currently anticipated, the pursuit of the Recapitalization may divert management time and attention away from other business matters and that the Company's business is exposed to commodity price and exchange rate fluctuations and changes in the general conditions in the oil and gas industry and in general economic conditions. In addition, the Company is exposed to each of the risks set forth in the AIF which has been filed on SEDAR and can be accessed at www.sedar.com. Except as may be required by applicable securities laws, Lightstream assumes no obligation to publicly update or revise any forward-looking information provided herein or otherwise, whether as a result of new information, future events or otherwise.