Magna Gold gets initial order under CCAA; monitor appointed

By Sarah Lizee

Olympia, Wash., March 27 – Magna Gold Corp. announced it was granted an initial order under the Companies' Creditors Arrangement Act (CCAA) by the Ontario Superior Court of Justice on application by Magna Gold seeking court protection from its creditors to allow it to restructure its business and property as a going concern.

The initial order provides for a stay of all proceedings in favor of Magna Gold, staying creditors from enforcing their claims until April 4. That date can be extended by further order of the court.

The initial order also continues the proceedings under the Bankruptcy and Insolvency Act, commenced by Magna Gold under a notice of intention to make a proposal filed on March 3.

It also authorizes the decision by Magna Gold to incur no further expenses in relation to any filings and disclosures that may be required by any federal, provincial or other laws respecting securities or capital markets in Canada or the United States and relieves Magna Gold of any obligation to call and hold its annual general meeting of shareholders until further order of the court.

Through the initial order, KSV Restructuring Inc. was appointed as monitor in the CCAA proceedings and will assist Magna Gold with continuing to operate its business in the ordinary course.

KSV will also monitor and update the court on the progress of the proceedings relating to the application for restructuring and provisional creditor protection by Molimentales del Noroeste, SA de CV, Magna Gold's indirect subsidiary, before the Second District Court for Insolvency Matters in Mexico City.

The monitor will also develop a forward-looking business plan for the benefit of Magna Gold's creditors and other stakeholders, and evaluate the viability of presenting a plan of compromise or arrangement to Magna Gold's creditors within the proposed CCAA proceedings.

Management of Magna Gold remains responsible for the day-to-day operations.

Magna is a Toronto-based gold and silver production company engaged in acquiring, exploring, developing and operating precious metals properties in Mexico.

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