Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K/A
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): February 20, 2009
APOLLO
GOLD CORPORATION
(Exact
name of registrant as specified in its charter)
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Yukon
Territory, Canada
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1-31593
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Not
Applicable
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File
Number)
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(I.R.S.
Employer Identification Number)
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5655
South Yosemite Street, Suite 200
Greenwood
Village, Colorado
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80111-3220
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (720) 886-9656
No
Change
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4I under the Exchange Act (17 CFR
240.13e-4I)
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EXPLANATORY
NOTE
On
February 24, 2009, Apollo Gold Corporation (the “Company”) filed a Current
Report on Form 8-K (the “Form 8-K”) with the U.S. Securities and Exchange
Commission. The purpose of this Amendment is to correct two items in
the Form 8-K: (i) the date upon which interest on amounts borrowed
under the Facility Agreement (as defined below) become payable (i.e., interest
payments commence on June 30, 2009 and not on September 30, 2009 as indicated in
the Form 8-K) and (ii) the number of common shares that the Company is required
to issue to Haywood (as defined below) in consideration for financial advisory
services (i.e., 3,172,840 common shares are issuable to Haywood and not
2,172,840 common shares as indicated in the Form 8-K). Set forth
below is an amended and restated Item 1.01 reflecting the foregoing
corrections. Items 2.03, 3.02, 8.01 and 9.01 have not been amended
but are restated below nonetheless for ease of reference.
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ITEM
1.01
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT
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On February 20, 2009, Apollo Gold
Corporation (the “Company”) entered into a Project Facility Agreement (the
“Facility Agreement”) with RMB Australia Holdings Limited, an Australian
corporation (“RMBAH”), RMB Resources Inc., a Delaware corporation (“RMBR”), and
Macquarie Bank Limited, an Australian corporation (“Macquarie” and together with
RMBAH, the “Financiers”). The Facility Agreement refinanced the
Bridge Facility Agreement (the “Bridge Facility Agreement”), dated December 10,
2008, among the Company and the Financiers.
Under the
Facility Agreement, the Company may borrow up to US$70,000,000 from the
Financiers at any time between February 20, 2009 and June 30, 2009 (the
“Availability Period”), after which time any undrawn portion of the
US$70,000,000 commitment will be cancelled and will no longer be available for
drawdown. The Facility Agreement requires the Company to use proceeds
from the facility only for: (i) the funding of the development, construction and
operation of the Company’s Black Fox project located in northern Ontario,
Canada; (ii) the funding of certain fees and costs due under the Facility
Agreement and certain related project agreements; (iii) corporate expenditures
of up to US$7,000,000 as approved by the Financiers in the Company’s corporate
budget (US$3,723,939 of which was used to repay the convertible debentures due
February 23, 2009 not held by RAB Special Situations (Master) Fund Limited (for
additional information regarding the maturity date extension of the convertible
debentures held by RAB Special Situations (Master) Fund Limited see the
Company’s Form 8-K filed with the U.S. Securities and Exchange Commission on
February 19, 2009)); (iv) repayment of $15,341,345 under the Bridge Facility
Agreement and (v) any other purpose that the Financiers approve.
The
Facility Agreement is subject to an arrangement fee of US$3,465,551, which is
payable upon the initial drawdown under the Facility Agreement, and a commitment
fee equal to 1% per annum calculated on a daily basis on the average monthly
balance of the undrawn commitment, which is payable in arrears on March 31, 2009
and June 30, 2009. Amounts borrowed under the Facility Agreement will
bear interest at LIBOR plus 7% per annum and will be payable quarterly
commencing June 30, 2009. The principal amount under the Facility
Agreement will be repayable by the Company in accordance with the following
schedule:
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Repayment Date
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Repayment Amount
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September
30, 2009
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US$9,300,000
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December
31, 2009
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US$6,000,000
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March
31, 2010
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US$4,400,000
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June
30, 2010
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US$4,000,000
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September
30, 2010
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US$3,200,000
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December
31, 2010
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US$2,200,000
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March
31, 2011
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US$1,800,000
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June
30, 2011
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US$2,700,000
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September
30, 2011
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US$2,800,000
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December
31, 2011
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US$2,900,000
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March
31, 2012
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US$4,900,000
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June
30, 2012
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US$6,800,000
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September
30, 2012
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US$9,000,000
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December
31, 2012
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US$3,800,000
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March
31, 2013
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US$6,200,000
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Under the terms of the Facility
Agreement, all cash proceeds generated from the Black Fox project must be
deposited into a proceeds account and may only be withdrawn and used by the
Company in accordance with the terms set forth in the Facility
Agreement.
In
connection with the Facility Agreement, the Company issued approximately
34,836,111 warrants (the “Warrants”) to the Financiers (11,637,775 to RMBAH and
23,198,336 to Macquarie) as partial consideration for financing services
provided in connection with the Facility Agreement. Each Warrant
entitles the holder to purchase one common share (the “Warrant Shares”) of the
Company pursuant to the terms and conditions of the Warrant. The
Warrants expire 48 months from their date of issuance and have an exercise price
of Cdn$0.252 per Warrant Share, subject to customary anti-dilution
adjustments. The Company has agreed to use its best efforts to
register the resale of the Warrant Shares with the U.S. Securities and Exchange
Commission promptly following the execution of the Facility
Agreement. The Warrants are in addition to the 42,614,254 warrants
(the “Bridge Warrants”) (21,307,127 to each Financier) issued to the Financiers
in connection with the Bridge Facility Agreement. Following the
issuance of the Warrants and assuming exercise by the Financiers of all warrants
held by them, RMBAH and Macquarie would beneficially own 14.88% and 18.54%,
respectively, of the Company’s issued and outstanding capital stock (on an
otherwise undiluted basis).
Borrowings under the Facility Agreement
are secured by a first lien on substantially all of the Company’s assets,
including the Black Fox project, and the stock of the Company’s
subsidiaries.
The Facility Agreement contains various
financial and operational covenants that impose limitations on the
Company. These include, among other things, limitations and covenants
regarding: (i) the conduct of the Black Fox project and use of
related assets; (ii) the completion of the Black Fox project; (iii) the use of
Company funds; (iv) compliance with applicable laws and permits; (v) mining
rights at the Black Fox project; (vi) the Company’s corporate budget; (vii)
provision of information; (viii) maintenance of accounting records; (ix)
maintenance of corporate existence; (x) compliance with certain material
agreements; (xi) capital maintenance requirements; (xii) payment of indebtedness
and taxes; (xiii) amendments to existing agreements relating to the Black Fox
project or entry into any such agreements; (xiv) amendments to governing
documents; (xv) disposition of or encumbrance of certain assets; (xvi) engaging
in other lines of business; (xvii) incurrence of indebtedness; (xviii) related
party transactions; (xix) creation of new subsidiaries; (xx) dividends and other
distributions; (xxi) maintenance of the property securing the Facility
Agreement; (xxii) insurance; (xxiii) subordination of intercompany claims;
(xxiv) tradeability of the Warrant Shares under Canadian securities laws; (xxv)
registration of the Warrant Shares under United States securities laws; (xxvi)
maintenance of listing status on the TSX and status as a reporting issuer under
Canadian securities laws; (xxvii) maintenance of certain financial coverage
ratios and minimum project reserves; (xxviii) satisfaction of a minimum tangible
net worth test; and (xxix) maintenance of the hedging arrangements described
below; and (xxx) the operation of the Black Fox project in compliance with an
agreed cash flow budgeting and operational model.
Subject in certain cases to applicable
notice provisions and cure periods, events of default under the Facility
Agreement include, without limitation: (i) failure to make payments when due;
(ii) certain misrepresentations under the Facility Agreement and certain other
documents; (iii) breach of financial covenants in the Facility Agreement; (iv)
breach of other covenants in the Facility Agreement and certain other documents;
(v) loss of certain mineral rights; (vi) compulsory acquisition or expropriation
of certain secured property by a government agency; (vii) certain cross-defaults
on other indebtedness of the Company; (viii) entry of certain judgments against
the Company that are not paid or satisfied; (ix) enforcement of encumbrances
against a material asset of the Company (or any such encumbrance becomes capable
of being enforced); (x) events of liquidation, receivership or insolvency of the
Company; (xi) maintenance of listing status on the TSX or NYSE Alternext U.S.
exchange and status as a reporting issuer under Canadian securities laws; or
(xii) occurrence of any event which has or is reasonably likely to have a
material adverse effect on the assets, business or operations of the Company,
its ability to perform under the Facility Agreement and other transaction
documents, the rights of the Financiers or the enforceability of a transaction
document. The Facility Agreement provides that in the event of
default, the Financiers may declare that the debts and monetary liabilities of
the Company are immediately due and payable and/or cancel the credit
facility.
As a part of the Facility Agreement,
the Company and the Financiers entered into a hedging program covering both gold
sales and part of the Company’s Canadian dollar operating costs. Specifically,
the Company entered into a 250,420 ounce gold forward sales program which will
be allocated across the four year term of the Facility Agreement. The weighted
average price of the sales program is $876.063 per ounce of gold. The
foreign exchange hedge program will be for the Canadian dollar equivalent of $60
million over a period covering the four year term of the Facility
Agreement.
Under the terms of a previously
existing engagement letter and related addendum (the “Engagement Letter”)
between the Company and Haywood Securities Inc. (“Haywood”) pursuant to which
Haywood agreed to provide financial advisory services to the Company, the
Facility Agreement constitutes an "alternative transaction" that requires the
Company to pay certain compensation to Haywood. Specifically, under
the terms of such engagement letter, the Company is required to compensate
Haywood by issuing to it 3,172,840 common shares and 2,567,901 common share
purchase warrants exercisable for a two year period at an exercise price of
Cdn.$0.256 per share (the “Haywood Warrants” and, together with the 3,172,840
common shares issued to Haywood, the “Haywood Securities”). The
Haywood Warrants contain customary anti-dilution provisions in the event of
certain corporate reorganizations or issuances of securities by the Company to
all its shareholders.
The foregoing description does not
purport to be complete and is qualified in its entirety by reference to the
Facility Agreement, Warrants, Haywood Warrants and the Engagement Letter
attached hereto as Exhibits 10.1 through 10.4 and incorporated by reference
herein. In addition, on February 23, 2009, the Company issued a press
release announcing the entry into the Facility Agreement, which is attached
hereto as Exhibit 99.1 and incorporated by reference herein.
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ITEM
2.03
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CREATION
OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE
SHEET ARRANGEMENT OF A REGISTRANT
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The information set forth in Item 1.01
of the Current Report on Form 8-K is incorporated by reference
herein.
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ITEM
3.02
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UNREGISTERED
SALES OF EQUITY SECURITIES
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The information set forth in Item 1.01
of the Current Report on Form 8-K is incorporated by reference
herein. The Company did not pay any underwriting discounts or
commissions in connection with the issuance of the Warrants or the Haywood
Securities, and will not pay any underwriting discounts or commissions in
connection with the issuance, if any, of any shares issuable upon exercise of
the Warrants or the Haywood Warrants. The issuance of the Warrants
and Haywood Securities was made, and the issuance of shares upon exercise of the
Warrants or the Haywood Warrants, if any, will be made, in a private placement
in reliance upon an exemption from registration under Section 4(2) of the
Securities Act of 1933 (assuming, in each case, that the Warrant Shares are
issued to the Financiers in accordance with the terms of the Warrants and the
Facility Agreement and the shares underlying the Haywood Warrants are issued to
Haywood in accordance with the terms of the Haywood Warrants).
As described in the Company’s Form 8-K
filed February 19, 2009, on February 16, 2009, the Company reached agreement
with RAB Special Situations (Master) Fund Limited (”RAB”) to amend certain terms
of the US$4,290,000 principal amount of convertible debentures due February 23,
2009 (the “Convertible Debentures”) held by RAB. As part of such
amendments, RAB agreed that the Company would have the option to repay on
February 23, 2009 the US$772,200 of accrued interest on RAB’s Convertible
Debentures in either common shares of the Company or cash. The
Company has elected to repay the US$772,200 of accrued interest to RAB in the
form of common shares. As a result, the Company issued 2,444,765
common shares to RAB on February 24, 2009, which is equal to US$772,200 divided
by the US dollar equivalent of the volume weighted average market price of the
Company’s common shares as quoted on the Toronto Stock Exchange during the
five-day period ending February 23, 2009.
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ITEM
9.01
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FINANCIAL
STATEMENTS AND EXHIBITS
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(d) Exhibits
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Exhibit
No.
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Description
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10.1
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Facility
Agreement (incorporated by reference to Exhibit 10.1 to the Current Report
on Form 8-K filed with the Securities and Exchange Commission on February
24, 2009)
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10.2
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Form
of Warrant Certificate (incorporated by reference to Exhibit 10.2 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 24, 2009)
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10.3
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Form
of Haywood Warrant Certificate (incorporated by reference to Exhibit 10.3
to the Current Report on Form 8-K filed with the Securities and Exchange
Commission on February 24, 2009)
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10.4
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Engagement
Letter (incorporated by reference to Exhibit 10.4 to the Current Report on
Form 8-K filed with the Securities and Exchange Commission on February 24,
2009)
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99.1
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Press
Release issued February 23, 2009 announcing entry into Facility Agreement
(incorporated by reference to Exhibit 99.1 to the Current Report on Form
8-K filed with the Securities and Exchange Commission on February 24,
2009)
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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APOLLO GOLD
CORPORATION |
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Date: February
25, 2009
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By:
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/s/ Melvyn
Williams |
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Melvyn
Williams |
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Chief Financial Officer and Senior Vice President -
Finance and Corporate Development
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