Geomaque creditors take shares in lieu of cash

The financial restructuring of junior gold producer Geomaque Explorations (GEO-T) made significant progress as three trade creditors agreed to take shares in payment of debts.

Geomaque’s principal lender, Resource Capital Fund II, transferred an oustanding warrant to the three creditors, who exercised it to receive 17.4 million shares of Geomaque. The exercise price, US$825,000, was applied against debts.

One creditor, equipment distributor Butler Machinery, will also get any proceeds beyond US$500,000 from the sale of equipment from Geomaque’s San Francisco gold mine in Mexico, and receive a 1% net smelter return on any production from unmined parts of the main San Francisco pit. The deal clears off Geomaque’s debt to Butler.

Mining contractor Sococo de Costa Rica, which was owed about US$2 million, agreed to a schedule for payment of the balance of the amount owing. Financial advisor Haywood Securities took shares in exchange for reducing the amount Geomaque owes it.