Gowest Gold has entered into minutes of settlement with Cementation Canada, with Cementation seeking payment of approximately $7.4 million in services and materials provided to the company under a contract between the parties dated March 2. 2017.
In connection with the settlement, Gowest will pay to Cementation approximately $5 million in cash ($500,000 of which has already been advanced) and Cementation will assign and transfer the net receivable amount owed to it by Gowest, being approximately $6.8 million, to a third-party purchaser of the debt. The settlement is to be completed on or prior to March 31. 2023.
On July 4, 2022, Gowest announced that a statement of claim was issued against the company by Cementation Canada, seeking payment for services and materials provided to the company under the aforementioned contract. At that time, Gowest also stated that Cementation had a lien to be registered on title to the company’s Bradshaw gold deposit. The statement of claim also named Greenwater Investment Hong Kong, the company’s largest shareholder and secured creditor, as a defendant in the action.
Per the settlement, Gowest will be obligated to pay the third-party purchaser the net receivable amount on or prior to March 31. 2026, without interest. At the option of the third-party purchaser, such net receivable amount will be convertible into common shares of Gowest, at the then applicable market price of the common shares.
If all conditions of the minutes of settlement are met, Gowest will receive a full and final release from Cementation and the lien registered on title to Bradshaw gold deposit will be discharged.
In 2020, Gowest’s spring drilling program in North Timmins, that covered 109 km2, intersected extensions of Bradshaw and drill highlights included 2.2 metres of 12.24 g/t gold and 2.5 metres of 1.89 g/t gold; both of these intersections include higher-grade intervals.
“In settling this claim with Cementation, including the assignment of the outstanding debt on terms favourable to Gowest, the company is one more major step closer to being able to restart mining activities at its 100% owned Bradshaw gold deposit and enabling the company to continue to move towards production,” said Dan Gagnon, president and CEO of Gowest.
For more information, visit www.GowestGold.com.