🕐15.09.08 - 16:43 Uhr
Appointment of Volunteer Administrators to Australian Subsidiaries
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GBS GOLD INTERNATIONAL INC.
20 Toronto Street, 12th Floor, Toronto
Ontario, Canada, M5C 2B8, tel: +1-416-777-1508
NEWS RELEASE
APPOINTMENT OF VOLUNTARY ADMINISTRATORS
TO AUSTRALIAN SUBSIDIARIES
Toronto, Canada - September 15, 2008 - GBS Gold International Inc.
(TSX:GBS)
("GBS Gold" or the "Company") reports that its indirect wholly-owned
subsidiary, GBS Gold Australia Pty Ltd ("GBS Australia"), has today
appointed Mr.
Andrew Saker, Mr.
Darren Weaver and Mr.
Martin Jones of
Ferrier Hodgson as joint and several Voluntary Administrators of GBS
Australia and its Australian subsidiary entities.
The appointment of the Administrators is required under Australian law
following the recent degradation of GBS Australias financial position and
places control of the Australian subsidiaries in the hands of the
Administrators.
Claims of creditors are delayed with the principal aim of
allowing the Australian subsidiaries to be restructured and recapitalized
with a view to being able to continue their business.
The appointment has arisen due to the Company being unable within the time
required to secure appropriate financing for recapitalizing its Australian
subsidiaries.
The appointment constitutes an event of default under the
Companys debt financing arrangements, including the existing C$46 million
secured promissory note facility and secured Australian banking facilities.
The security arrangements give the secured parties certain rights and
decisions with respect to the Companys assets.
The amounts due under the
promissory note facility have become repayable and discussions have
commenced with the noteholders.
The Administrators are making immediate
contact with the Companys noteholders, banks and other creditors and, in
consultation with the Board and management of GBS Gold, will review the
Companys operations and investigate production, restructuring and
recapitalization plans.
Attached to this news release is a letter from the Administrators setting
out the process in Australia and the approach for seeking and agreeing to
potential restructuring outcomes.
If the Australian subsidiaries cannot
ultimately be restructured or continue as a going concern, they may then be
subject to liquidation proceedings.
The appointment of the Administrators is required as a result of production
issues and weaker operating cashflows leading to a reduction in the
Companys cash resources.
In particular, GBS Golds Australian subsidiaries
have recently suffered from lower production and cashflow losses as a result
of the following:
.
A stope failure experienced in the Brocks Creek underground mine
in June and recent experiences within lower levels of this orebody.
Following the stope failure, development of the underground workings
continued into lower levels of this mine where it is now evident that ore
tonnes and gold grades in these mining levels are below those experienced in
the higher levels of the mine.
As a result, the economics of the mine have
deteriorated and additional drilling is required to confirm the geological
interpretation that ore tonnes and grades will improve towards previous
levels as mining progresses deeper.
.
Mining of the Chinese South Extension open pit mine has recently
required, and is expected to continue to require, removal of greater
quantities of waste rock material than originally anticipated, resulting in
reduced ore quantities available for the Union Reefs plant.
Ore from other
available open pit sources is not expected to cover this shortfall.
.
In the course of ramping up production to in excess of 200,000
tonnes per month through the Union Reefs plant, the Company incurred
additional production and capital costs while experiencing significant cost
increases in Australia, particularly in fuel, processing consumables and
labour.
.
Production delays and lower ore grades than planned at the Toms
Gully operation have led to increased start-up costs.
Based on recent
mining and processing activities, ore grades from the underground mine in
the short term are expected to be less than budgeted until the higher grade
veins of the orebody are accessed.
.
The Companys inability to secure appropriate financing in the
current market conditions.
The Company is currently working closely with the Administrators to assess
the effect upon the future business and direction of the Company and its
Australian subsidiaries, and will provide further advice to shareholders in
due course.
For further information regarding the Australian subsidiaries, the conduct
of the Australian business or to discuss the administration process, the
Administrators may be contacted at the following:
Mr.
Andrew Saker
Partner, Ferrier Hodgson
Joint and Several Administrator
Level 26, 108 St Georges Terrace
Perth, Western Australia, 6000
AUSTRALIA
Tel: +61 (0)8 9214 1444
Fax: +61 (0)8 9214 1400
Website: www.ferrierhodgson.com
Email:
About GBS Gold International Inc.
GBS Gold is a junior gold producer with 2.7 million ounces of Indicated
Resources and 1.7 million ounces of Inferred Resources of gold at its Union
Reefs Operations Centre located in the Northern Territory of Australia.
GBS
Gold produces gold through its 2.5Mtpa Union Reefs processing plant.
The
Company has recently commenced gold production at its Toms Gully operation
and plans to develop its Cosmo Deeps underground mine in 2009-10.
GBS Gold
has consolidated over 3,500km2 of prospective tenements and gold deposits
and also holds gold exploration properties in Western Australia.
The
Company trades on the Toronto Stock Exchange under the symbol "GBS".
For more information about GBS Gold International Inc., please visit our
website at www.gbsgold.com or email us at
, or contact:
In Toronto, Canada:
In Perth, Australia:
Gil Playford, Chairman and CEO
Peter Kerr
Tel: +1 416 777 1508
Chief Financial Officer
Tel: +61 (0)8 9492 2500
The TSX does not accept responsibility for the adequacy or accuracy of the
information contained herein.
The Companys mineral resources comprise indicated resources of 26.8 million
tonnes at 3.1g/t for 2.7 million ounces of contained gold and inferred
resources of 21.5 million tonnes at 2.4g/t for 1.7 million ounces of
contained gold as set out in its technical reports (refer below) and news
releases dated May 13 and July 2, 2008.
The Company has filed on May 8, 2008
a technical report entitled "GBS Gold International: Burnside, Union Reefs,
Maud Creek and Moline Projects, Northern Territory, Australia" dated
February 2008 and authored by Jeames McKibben and Christine Standing of
Snowden Mining Industry Consultants Pty Ltd and Heath Gerritsen of HG Mine
Design Pty Ltd.
The Company has also filed two technical reports on its
Toms Gully project being a technical report entitled "Form 43-101 Technical
Report on the Toms Gully Project" authored by Paul Payne of Resource
Evaluations Pty Ltd dated and filed on January 14, 2008 and a technical
report entitled "Technical Report on the Mineral Reserves of the Toms Gully
Gold Mine" authored by Heath Gerritsen of HG Mine Design Pty Ltd dated
December 2007 and filed on January 31, 2008.
The Company has completed feasibility studies on its Toms Gully and Cosmo
Deeps projects, and a life-of-mine study on its operating Brocks Creek
underground mine, all of which have declared mineral reserves in accordance
with the above technical reports.
Where the Company has not completed a
feasibility or life of mine study on a particular project, there is no
certainty that such project will be economically successful.
Mineral
resources that are not mineral reserves do not have demonstrated economic
viability.
Certain disclosures in this release, including managements assessment of
GBS Golds plans and projects, constitute forward-looking statements that
are subject to numerous risks, uncertainties and other factors relating to
GBS Golds operation as a mineral development company that may cause future
results to differ materially from those expressed or implied in such
forward-looking statements.
The following are important factors that could
cause the Companys actual results to differ materially from those expressed
or implied by such forward looking statements: fluctuations in gold prices
and currency exchange rates; uncertainties relating to interpretation of
drill results and the geology, continuity and grade of mineral deposits;
uncertainty of estimates of capital and operating costs, recovery rates,
production estimates and estimated economic return; general market
conditions; the uncertainty of future profitability; and the uncertainty of
access to additional capital.
Full descriptions of these risks can be found
in the Companys Annual Information Form available on the SEDAR website,
www.sedar.com.
Readers are cautioned not to place
undue reliance on forward-looking statements.
GBS Gold expressly disclaims
any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise.