Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): December 10, 2008
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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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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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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Pre-commencement
communications pursuant to Rule 13e-4I under the Exchange Act (17 CFR
240.13e-4I)
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ITEM
1.01
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT
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On
December 10, 2008, Apollo Gold Corporation (the “Company”) entered into a Bridge
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
Company borrowed US$15,000,000 at the closing, which was deposited in a proceeds
account. The Company may withdraw US$6,000,000 from the proceeds
account following the closing. The Company’s ability to borrow the
remaining US$9,000,000 from the proceeds account is subject to the prior written
approval of the Financiers. Under the Facility Agreement, the
Financiers will not approve additional withdrawals unless prior to
February 28, 2009 the Company raises equity or makes other funds available
in an amount and on terms satisfactory to the Financiers to fund the Company’s
corporate level expenditures unrelated to the Black Fox project.
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, and (ii) the
funding of certain fees and costs due under the Facility Agreement and certain
related project agreements.
The
Facility Agreement is subject to a five percent arrangement fee and matures on
the earlier to occur of (i) June 30, 2009 or (ii) the first drawing under a
long-term project finance facility, if any that may be entered into by the
Company after the date of the Facility Agreement. Amounts borrowed
under the Facility Agreement, including amounts in the proceeds account, will
bear interest at LIBOR plus 10%, payable in arrears on the last day of December
2008, March 2009 and June 2009. The Facility Agreement provides that
the Company, at its option, may forgo cash payment of interest for any interest
period, in which event each Financier may elect to either (i) convert the
interest payment owed to it into the Company’s common shares (the “Conversion
Shares”) or (ii) capitalize the interest payment owed to it and add such amount
to the principal amount of the loan. The number of Conversion Shares
issuable is calculated by dividing the interest payment by the volume weighted
average market price of the Company’s shares on the Toronto Stock Exchange (the
“TSX”) during a trailing five-day period prior to the interest payment date
discounted by the maximum discount permitted by the TSX. The Company
has agreed to use its best efforts to register the resale of the Conversion
Shares and the Warrant Shares (as defined below) with the U.S. Securities and
Exchange Commission promptly following the execution of the Facility
Agreement.
Pursuant
to the Facility Agreement, the Company issued 42,614,254 warrants (the
“Warrants”) (21,307,127 to each Financier) 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$0.221 per Warrant Share, subject to
customary anti-dilution adjustments.
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) compliance with applicable laws and permits; (iii) mining
rights at the Black Fox project; (iv) the Company’s corporate budget; (v)
provision of information; (vi) maintenance of accounting records; (vii)
maintenance of corporate existence; (viii) compliance with certain material
agreements; (ix) capital maintenance requirements; (x) payment of indebtedness
and taxes; (xi) amendments to existing agreements relating to the Black Fox
project or entry into any such agreements; (xii) amendments to governing
documents; (xiii) disposition of or encumbrance of certain assets; (xiv)
engaging in other lines of business; (xv) incurrence of indebtedness; (xvi)
related party transactions; (xvii) creation of new subsidiaries; (xviii)
dividends and other distributions; (xix) maintenance of the property securing
the Facility Agreement; (xx) insurance; (xxi) subordination of intercompany
claims; (xxii) tradeability of the Conversion Shares and the Warrant Shares
under Canadian securities laws; (xxiii) registration of the Conversion Shares
and the Warrant Shares under United States securities laws; and (xxiv)
maintenance of listing status on the TSX and status as a reporting issuer under
Canadian securities laws.
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.
The foregoing description does not
purport to be complete and is qualified in its entirety by reference to the
Facility Agreement, Warrant, General Security Agreement and Priority Agreement
attached hereto as Exhibits 10.1 through 10.4 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, and will not pay
any underwriting discounts or commissions in connection with the issuance, if
any, of any Warrant Shares or Conversion Shares. The issuance of the
Warrants was made, and the issuance of the Warrant Shares and Conversion Shares,
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 and Conversion Shares are issued to the Financiers
in accordance with the terms of the Warrants and the Facility
Agreement).
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ITEM
9.01
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FINANCIAL
STATEMENTS AND EXHIBITS
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Exhibit
No.
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Description
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10.1
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Facility
Agreement
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10.2
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Form
of Warrant Certificate
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10.3
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General
Security Agreement
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10.4
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Priority
Agreement
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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.
Date: December
16, 2008
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APOLLO GOLD
CORPORATION |
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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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EXHIBIT
INDEX
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Exhibit
Number
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Description
of Document
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10.1
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Facility
Agreement
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10.2
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Form
of Warrant Certificate
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10.3
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General
Security Agreement
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10.4
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Priority
Agreement
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