San Gold will not pay interest due March 31 on convertible debentures

By Toni Weeks

San Luis Obispo, Calif., March 25 – San Gold Corp. announced that it will not be paying the C$2 million interest payment due March 31 on its subordinated unsecured convertible debentures.

As previously reported, the company filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act of Canada on Dec. 22.

The stay period provided by the Act has been extended by court order while San Gold takes steps in the proposal proceedings.

As previously reported, San Gold decided to file the notice “after extensively exploring restructuring and refinancing alternatives” with its legal and financial advisers and its principle secured lender.

A notice of intention is the first step to restructuring under Canada’s Bankruptcy and Insolvency Act and it offers San Gold an initial 30 days of protection from creditor action against the company, according to the previous release.

During the protection period, the company said it would continue with normal operations at its Rice Lake mine complex.

MNP, Ltd. will serve as the company’s proposal trustee and assist San Gold in its restructuring efforts.

San Gold is a Canadian producer, developer and explorer of gold with a mining complex located near Bissett, Manitoba.

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