ABCP Notes Sold, Bank Debt Retired
TORONTO, ONTARIO--(Marketwire - July 14, 2011) - Unigold Inc. (TSX VENTURE:UGD) is pleased to announce that it completed the sale of its remaining investment in Asset Backed Commercial Paper restructured notes ("restructured notes") for gross proceeds of $7,414,553. After retiring the bank debt collateralized by the restructured notes, Unigold added approximately $1.3-million to its treasury and improved its working capital by approximately $6.0-million.
Unigold took advantage of a developing market for the restructured notes to make the sale. In 2007 and 2008, Unigold made provisions totalling $5-million against the carrying value of its investment in the restructured notes to recognize the estimated decline in fair market value at that time. The value of the provision decreased in the second quarter when the restructured notes were re-measured at estimated fair market value using market quotes. A non-cash gain of approximately $2.4-million was recorded in Q2 as a result of the revaluation. Concurrent with the sale, Unigold repaid and terminated its credit facility.
The July 12th sale followed previous sales in the second quarter of its US$ denominated restructured notes for net proceeds of approximately $180,000.
About Unigold Inc.
Unigold Inc. is exploring to find and develop gold deposits on its 100-per-cent-owned 226 km2 Neita Property located in the Dominican Republic. Having the largest land package in the Dominican Republic, the goal is to target bulk tonnage, open pittable, oxide gold deposits within a very similar geological setting to the world class Pueblo Viejo gold project located 150 kilometres to the southeast. Unigold benefits from a 13-year tax holiday on all corporate, sales taxes and import duties in the Dominican Republic. The economics of any discovery will be significantly improved by the tax holiday.
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