Ann: Toronto Listing Update, page-30

4) Loan agreement with MACA Limited is the Sprott replacement and a better deal

From the recent MACA termination of mining services agreement announcement

Under the Agreement, all amounts owing to MACA by Beadell including unpaid invoices, unbilled accruals, loans, termination costs, demobilisation and fleet purchase costs will be consolidated into one loan with an initial payment of $3 million due following closing of the Financing, a further payment of $3 million on 31 March 2019 and then monthly payments of $1.5 million commencing 1 July 2019 until the loan is repaid or 30 June 2022 whichever is the earlier. The total loan amount is approximately $61 million.

From the Sprott loan announcement

Beadell Resources Limited (Beadell or Company) is pleased to advise that it has received investment committee approval from Sprott Private Resource Lending (Collector), L.P. (Sprott) to be provided with a senior secured credit facility up to US$60 million (Credit Facility) to be used for the ongoing development of the Tucano Gold Mine, retirement of the existing secured loan facility and for general corporate purposes. The Credit Facility is subject to mutually satisfactory documentation and other customary conditions precedent for this type of facility, which are expected to be completed by 31 March 2018.

The Sprott loan was going to be used to retire the Brazilian bank loan (secured loan) and for working capital. It was never going to be able to repay MACA’s unsecured amounts owing.

The MACA loan is a seperate $61 million loan that appears to be trying to leapfrog the queue of unsecured creditors by attaching a subordinate security to the loan (if they can get the approval of the exiting secured creditors). The agreement converts the unpaid invoices and unbilled accruals and other loans and unpaid costs into a loan which gets around the “meet liabilities when they fall due” complication imposed by the corporations law. It’s basically a compromise reached with a major unsecured creditor so that the company can continue trading. Begs the question though, how was the company trading before they put this loan in place? as when the Sprott loan was terminated and the CR amount announced the amount proposed to be raised didn’t seem to be enough to cover outstanding current liabilities. Maybe they have had an outstanding quarter of gold production which could in theory explain it all. Esh