EDITOR: | March 30th, 2015 | 20 Comments

Great Western Minerals Provides Update Regarding Convertible Bond Restructuring and Annual Financial Statement Filing; Applies for Management Cease Trade Order

| March 30, 2015 | 20 Comments

March 30, 2015 (Source: Marketwired) — Great Western Minerals Group Ltd. (“GWMG” or the “Company”) (TSX VENTURE: GWG) (OTCQX: GWMGF) provides an update regarding its cash position and discussions with a steering committee of holders (the “Steering Committee”) of its US$90 million 8.00 percent Secured Convertible Bonds due 2017 (the “Convertible Bonds”), as well as its annual financial statement filing and application for a management cease trade order.

As of March 30, 2015, the Company had consolidated cash and cash equivalents of approximately C$5.2 million. The next interest payment on the Convertible Bonds of approximately C$4.5 million (US$3.6 million) is due on April 7, 2015.

As previously disclosed, the Company has been engaged in discussions with the Steering Committee regarding a potential restructuring of the Convertible Bonds. As of today, those discussions have not resulted in the Company and the Steering Committee entering into a binding agreement with respect to a restructuring of the Convertible Bonds.

The Company is exploring strategic alternatives to a consensual restructuring of the Convertible Bonds in the event an acceptable binding agreement with the Steering Committee cannot be reached in a timely manner. Those strategic alternatives may include the initiation of a sale or investment solicitation process with respect to the Company’s assets and business and/or the commencement of proceedings under applicable restructuring legislation. The Company has engaged PricewaterhouseCoopers and continues to retain its financial advisor, CIBC World Markets Inc., to assist in its review of strategic alternatives.

The Company also announces that, as a result of the above circumstances, it will not be able to file its audited annual financial statements for the year ended December 31, 2014 (the “Financial Statements”), its management’s discussion and analysis on the Financial Statements, the CEO and CFO certificates in respect of the Financial Statements and its annual information form for the year ended December 31, 2014 (collectively, the “Reporting Documents”) by March 31, 2015.

The Company has filed an application with the Financial and Consumer Affairs Authority of Saskatchewan, its principal regulator, for a management cease trade order, in accordance with National Policy 12-203 – Cease Trade Orders for Continuous Disclosure Defaults (“NP 12-203”). If approved, this application would give the Company extra time to determine whether a consensual restructuring or a strategic alternative transaction can be reached with the Steering Committee or to proceed independently with a strategic alternative transaction, which in each case should enable the Company to file its Reporting Documents without a full cease trade order being issued. There can be no certainty that a management cease trade order will be granted. The applicable regulatory authorities may instead determine to issue a full cease trade order against the Company.

The Company confirms that it intends to satisfy the provisions of the alternative information guidelines found in Section 4.3 and 4.4 of NP 12-203 for so long as it is delayed in filing the Reporting Documents.

About GWMG
Great Western Minerals Group Ltd. is a leader in the manufacture and supply of rare earth element-based metal alloys. Its specialty alloys are used in the battery, magnet and aerospace industries. Produced at the Company’s wholly-owned subsidiary, Less Common Metals Limited in Ellesmere Port, U.K., these alloys contain transition metals, including nickel, cobalt, iron and rare earth elements. As part of the Company’s vertical integration strategy, GWMG also holds 100% equity ownership in Rare Earth Extraction Co. Limited, which controls the Steenkampskraal monazite mine in South Africa. The Company also holds interests in three rare earth exploration properties in North America that are not active.

The Company routinely posts news and other information on its website at www.gwmg.ca.

Email inquiries can also be made to info@gwmg.ca.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements
Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of words such as “expect”, “may”, “could”, “anticipate” or “will” and similar expressions (including negative and grammatical variations)) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Certain forward-looking statements in this News Release relate to: ability of the Company to restructure the Convertible Bonds or to find an alternative to such restructuring in a timely manner, and the availability of other options to the Company including the possibility of filing for protection under applicable restructuring legislation; the ability of the Company to file the Reporting Documents; the issuance of a management cease trade order or a full cease trade order; satisfaction of the provisions of the alternative information guidelines in NP 12-203. Forward-looking statements are based upon the opinions, expectations and estimates of management of GWMG as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to; the adequacy of the Company’s financial resources, including in connection with any possible restructuring of the Convertible Bonds and/or the availability of additional cash from operations or from financing on reasonable terms or at all; the assumptions and estimates in the Feasibility Study of the SKK Project proving to be accurate over time; the construction, commissioning and operation of the proposed monazite processing facility within estimated parameters; mine refurbishment activities; reliance on third parties to meet projected timelines and commencement of production at the SKK Project; reliance on successful negotiations with third parties to enter into a tolling arrangement to separate mixed rare earth materials; risks related to the receipt of all required approvals including those relating to the commencement of production at the SKK Project; delays in obtaining permits, licenses and operating authorities in Canada, South Africa and the United Kingdom; environmental matters; water and land use risks; risks associated with the industry in general; commodity prices and exchange rate changes; operational risks associated with exploration, development and production operations; delays or changes in plans, including those estimated in the Feasibility Study of the SKK Project; risks associated with the uncertainty of resource and reserve estimates; health and safety risks; uncertainty of estimates and projections of production, costs and expenses; risks that future SKK Project and region exploration results may not meet exploration or corporate objectives; political risks inherent in South Africa; risks associated with the relationship between GWMG and/or its subsidiaries and communities and governments in Canada and South Africa; radioactivity and related issues; dependence on one mineral project; loss of, and the inability to attract, key personnel; the factors discussed in the Company’s public disclosure record; and other factors that could cause actions, events or results not to be as anticipated. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although GWMG believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. Except as required by law, GWMG does not assume any obligation to update forward looking statements as set out in this news release. The forward-looking statements of GWMG contained in this News Release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement and the risk factors contained in GWMG’s Annual Information Form available under the Company’s profile at www.sedar.com.


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  • hackenzac

    Cart threw a wheel.

    March 30, 2015 - 9:08 PM

  • Lou

    “The Company is exploring strategic alternatives to a consensual restructuring of the Convertible Bonds in the event an acceptable binding agreement with the Steering Committee cannot be reached in a timely manner.”

    Sounds to me like a U.S. Chapter 11 Bankruptcy reorganization. Does Canadian law have something equivalent? If so, one way forward for GW might be to submit a plan to the court that entails selling the Steenkampskraal mine to an entity that will bring it to production, while retaining their off-take contract to provide feedstock to LCM. They would use the proceeds from the sale to partially retire some portion of what is owed to the bond holders. The remaining obligation to the bondholders might be converted to a % equity interest, along with the current stockholders, in a “new” Great Western centered around its magnet alloy manufacturing business.

    If LCM were not locked into a non-viable conceptual straight jacket (mine to market), they would have a reasonable chance to thrive producing magnet alloy to a European and Japanese market using Steenkampskraal feedstock.

    Using their know-how, they could explore creative partnerships to expand their reach. For instance, using their know-how and Ucore’s feedstock, they might form a joint venture and build a facility in the Ketchikan peninsula with funding help from the Alaska bonding authority.

    I am not a Great Western groupie, but rather, a Great Western casualty. Great Western has assets that are currently punching below their prospective weight. IMHO.

    March 31, 2015 - 9:52 AM

  • alvarita

    Just another in the list of REE companies yet to fail. No surprise.

    March 31, 2015 - 1:55 PM

  • Fixed

    GWMG has not failed …yet…Would love to hear from “The Experts”…lol…silence is all I hear what does Jack, Chris or Tracy have to say? Would love to hear it.

    March 31, 2015 - 6:21 PM

  • Bill Keenes

    Fred, GWMG may not have yet failed – but it does appear fatally wounded.

    April 1, 2015 - 5:09 AM

  • Fred

    Bill, wrong guy. I think that Great Western’s assets will survive. Wouldn’t it be great if their bond holders got together with Molycorp’s bond holders, placed some serious management in charge, and turned it all into a real company?

    April 1, 2015 - 11:50 AM

  • Jakeslicks

    Who knows whats been going on with gwmg, but as a shareholder I would be thrilled to see a class action law suit against them with Gary Billingsley and JimEngdahl targeted, they walked away with under odd circumstances and half of Hoidas Lake in their pocket with a wink and nod but not a word about it to long term shareholders.
    This has been years of BS with this company and it should be investigated somehow.

    April 2, 2015 - 2:16 AM

  • Jack Lifton


    What is there to say? Do you think clever reparte will “save” the current GWMG? I long ago gave up on trying to figure out the company’s operating model. They borrowed too much and cannot pay. This has nothing to do with the value of the deposits or the enterprise value of LCM. Those who have lost a home or a car to a failure of financial planning seem to understand GWMG better than the learned armchair financiers of this and many other “lists.”

    The problem is in management’s stars as well as in themselves-to paraphrase the greatest writer yet in any language.

    April 2, 2015 - 9:02 AM

  • Fixed

    Thank you Jack for at least repliying…If concidering expertise in the sector you are what you are… you are definitely an expert in clever reparte or witty little remarks so was suprised you had none to entertain . You say they borrowed too much money and can’t repay. If that is true are you also saying GWMG will not survive and the current common shareholders are doomed?

    April 2, 2015 - 12:07 PM

  • Mr. kean

    Do you still have shares in GW at 17 cents Jack L

    April 2, 2015 - 12:11 PM

  • Jack Lifton

    Mr Kean,

    No. I divested my interest in GWMG some time ago.


    i do not decide when a person or a company is going to go bankrupt. This comes about when a company is insolvent and/or is no longer a going concern. You know as well as I do that the senior debt holders, who are probably the latest bond holders, have first call on the value of the assets. If there is a bankruptcy I doubt there will be anything left for the shareholders.

    Molycorp’s shareholders are in a similar dilemma only the numbers are much much larger.

    So are Lynas’ shareholders.

    This is in all cases due to some combination of both market conditions and poor planning.

    Jack Lifton is an observer not a wizard. I am armed only with analytical skills based on facts and logic.

    April 2, 2015 - 10:52 PM

  • Fixed

    I’d say nobody has facts except GWMG and as far as I can see the bondholders are trying to take the company but whether they can or not will see…Since you are so sure that the current management is incompetent it will be quite interesting to see how good your analytical skills and assumptions are. Should unfold soon … no?

    April 3, 2015 - 10:50 AM

  • Joe o

    Fixed. I don’t think jack called current management incompetent. Fact this I don’t think they got GW in this mess. but they are a mess. I got beat up and brusised badly with moly and to some extent GW. My hopes now are in ucore with a sprinkle of Trer ,tas and ree

    April 3, 2015 - 11:03 AM

  • motherearth

    GWG may default on their bond payment next week.The bondholders love that 8% interest payment coming in but now management will ask them to lower the rate or they go somewhere else and get the funding. With only 5 plus million left this means if they default on this coming payment they have more time and the BH will know Marc means business. What are your thoughts JackÉ thank you

    April 4, 2015 - 9:05 AM

  • Jack Lifton


    Who is going to refinance GWMG? And even if you have someone in mind do you think that by defaulting on an 8% rate they will get a refinance at a LOWER rate??? This is not a homeowner in the states refinancing an under water home mortgage with political pressure on lenders to bail him out if possible. In the days remaining to GWMG their best hope is to kick the can down the road again at, say, 12% from some lender who has skin in their game. I doubt if even that rate-at which Molycorp already has debt-could save them, because they need a lot of capital to continue and even Pay-Day lenders are not suicidal.


    April 4, 2015 - 1:03 PM

  • motherearth

    Jack so why would they finance them in the first place , did the bondholders have their eye on LCM or SKK all along , so who ends up with this Company?

    April 4, 2015 - 2:55 PM

  • motherearth

    I should have said who is going to run LCM , the bondholders? will they do a better job ? or will they sell it off to the highest bidder.

    April 4, 2015 - 3:24 PM

  • Fixed

    Jack face the facts you do not know what will happen…lol… Just admit that until all is said and done you know nothing. Then we know you are not a wizard and give us your take on things and if you are wrong then just say it. One thing that bothers me is the fact that you seem to worship Jim and do not like Marc Levier…why… after if GWMG fails will be watching your fab four until then keep pumping… Good old round top…and the rest. Will be watching to see if you know more than Marc…lol…

    April 4, 2015 - 4:08 PM

  • Jack Lifton


    The current bondholders have shown no interest or skills in running LCM. I suspect their original due diligence though gave a lot of value to LCM as it should have.

    LCM has a first class management in the UK. Anyone who buys it now would be well advised to retain that management. The problem is a limited market for LCM’s specialty product. In fact LCM dominates the market for a particular type of rare earth magnet alloy. The next owner will need to expand the company’s products and aggressively market them while seeking always to source raw materials competitively outside of China wherever and whenever possible.


    April 5, 2015 - 10:56 AM

  • Jack Lifton


    I did not attend Hogwarts


    April 5, 2015 - 10:57 AM

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