Former Allied Nevada Gold emerges from Chapter 11 proceedings

By Mark Reccek

Bethlehem, Pa., Oct. 23 – Hycroft Mining Corp., formerly Allied Nevada Gold Corp., completed its financial restructuring process and successfully emerged from Chapter 11 bankruptcy on Oct. 22, according to a Thursday press release.

The company eliminated $447.7 million of debt and related interest payments from its balance sheet while closing on two financings, consisting of a $126.7 million first-lien term loan credit agreement and $95 million of second-lien convertible notes, the release said.

The release indicates the credit agreement proceeds were used to repay the company’s outstanding loan obligations related to its revolving credit agreement and the amounts owed under the company’s diesel and cross-currency swap arrangements. Meanwhile, the proceeds from the issuance of the convertible notes were used to repay the company’s debtor-in-possession facility and other payments required under the company plan, with the remaining proceeds used for ongoing corporate needs.

Additionally, the company’s existing unsecured notes and general unsecured claims have been canceled and holders of the claims have received equity in the reorganized company or cash in amounts negotiated by the major creditor groups, according to the release.

Although the company issued three million new common shares to its creditors, it said it does not plan to list the new common shares for public trading or remain as a reporting company with the United States Securities and Exchange Commission.

The release also said previous equity shareholders will receive warrants with a seven-year term representing 17.5% of the outstanding new common shares.

“We appreciate the support of our lenders and creditors who have been instrumental in our achieving a successful emergence from these Chapter 11 proceedings,” Randy Buffington, president and chief executive officer of Hycroft Mining, said. “Their commitment to the future of this company has been a significant step in our goal of realizing Hycroft’s potential.”

Allied Nevada is a Reno, Nev.-based gold and silver miner that filed for bankruptcy on March 10, 2015. Its Chapter 11 case number is 15-10503.

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