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Galane Gold settles outstanding claims with unit Galaxy Gold's former mining contractors

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Galane Gold settles outstanding claims with unit Galaxy Gold's former mining contractors

and subsidiary have enteredinto a full and final settlement agreement with Traxys Europe SA, Mine2Market Sarland certain other companies, collectively known as the Traxys parties, regardingvarious outstanding claims.

The claims werefrom a period when the Traxys parties were handling Galaxy Gold's mining operations.

As a resultof the settlement, the Traxys parties unconditionally and irrevocably waived allclaims in relation to the various contract mining, off-take and tailings agreementsand indebtedness entered into or owed by Galaxy and subsidiary .

The Traxys partieshave also released their security interests against Galaxy Gold's assets, includingits plant and mining licenses.

In connectionwith the settlement, the Traxys parties have agreed to settle its claim for US$4.3million of indebtedness owed by Galaxy Gold and Galaxy Gold Reefs in exchange forGalane Gold's issuance of unsecured convertible debentures in the aggregate principalamount of US$3.2 million.

The debenturesmature in November 2019 and bear 4% interest per year, which accrues until the maturitydate.

The principal,at the option of the holder, is convertible into common shares at a price of C$1.00per share, based on a pre-determined exchange rate of US$1 for C$1.30.

The interestis convertible into common shares based on a pre-determined exchange rate of US$1for C$1.30, at a price equivalent to the greater of C$1.00 and the discounted marketprice at the time of conversion.

"We arepleased to have completed this settlement with the Traxys parties. This settlementis a significant step in our process of cleaning up legacy issues with Galaxy andremoves one of the final hurdles to recommencing production," said Nick Brodie,CEO of Galane Gold.

"The exchangeof a sizable amount of short-term indebtedness of Galaxy into the long term indebtedness,and the cancellation of the security on the assets should provide additional financialflexibility to implement our strategic vision for Galaxy," Brodie added.