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Carpathian ( finally liquidates its shareholders

  • Carpathian Gold (T.CPN, C$0.29, 555M SO, 590.5M FD, C$161M MCap,— We've written quite a bit about this company. The bottom line is simple: the company is trading at a discount to the value of the gold mine, is on track to deliver on time and on budget in Brazil, and on top of this, it has a huge gold-copper resource in Romania for which the market is giving it no value. The stock will almost certainly rise based on the former and could eventually become a 10-bagger based on that alone, given the low starting point. It's hard to put odds on the Romanian blue sky, but whatever they are, free is a great price, and the consequences of success with that project would be huge.

And here's tonight's news on the stock. Say buh-bye to the last vestiges of your CPN money, Casey Research subscribers:

Carpathian Gold Inc. Announces Restructuring

TORONTO, ONTARIO--(Marketwired - Nov. 20, 2015) - Carpathian Gold Inc. (CSE:CPN) (the "Corporation" or "Carpathian") advises that, as a result of an agreement (the "Option Agreement") entered into between Macquarie Bank Limited ("Macquarie") and Brio Gold Inc. ("Brio"), Brio has been granted an option to (i) acquire all of Macquarie's rights and interests in the project loan facility, the gold purchase agreement and the gold sale and purchase agreement and related guarantees previously entered into by Macquarie and the Corporation, Mineracão Riacho dos Machados Ltda. ("MRDM") and certain other subsidiaries of Carpathian (collectively, the "Obligors"), and (ii) receive from Macquarie an assignment of Macquarie's security in respect of the foregoing agreements (all of the foregoing agreements and the security are collectively referred to as the "Financial Assets").
Pursuant to the Option Agreement, Macquarie has agreed to forbear from exercising any default-related rights, remedies, powers or privileges, or from instituting any enforcement actions or collection actions against the Obligors under the Financial Assets until the earlier of (i) the exercise or early termination of the Option Agreement and (ii) February 15, 2016. Under the Option Agreement, to the extent that cash flows from the Project are insufficient to meet ongoing costs and expenses, Macquarie has agreed with Brio to continue to provide funding to MRDM, subject to the terms and conditions set out in the Option Agreement. Any drawdowns requested by MRDM under the project loan facility remain subject to the discretion of Macquarie.
Furthermore, the Corporation has entered into an agreement with Brio and Macquarie (the "Restructuring Agreement") whereby the Corporation and Brio have agreed that, in the event Brio exercises its option to acquire the Financial Assets under the Option Agreement, the Corporation will work with Brio with respect to a restructuring procedure to be initiated by Brio with the objective of transferring 100% ownership of MRDM's Riacho dos Machados gold project in Minas Gerais, Brazil (the "Project") to Brio (the "Restructuring"). Pursuant to the Restructuring Agreement, Brio will deliver to the Corporation and its directors a full release and discharge with respect to any liability under the Financial Assets, including the Corporation's guarantee thereof. Following the Restructuring, the Corporation shall continue to own its Romanian assets, but shall have no ownership or interest in, or liabilities in respect of, MRDM or the Project.
As well, upon closing of the Restructuring, Brio has agreed to a US$1 million subscription of common shares of the Corporation, the whole at a price to be mutually agreed and subject to the requirements of the Canadian Securities Exchange.