Gowest Gold Ltd. said Aug. 9 that it has received a notice of events of default and termination and a notice of intention to enforce security pursuant to section 244 of Canada's Bankruptcy and Insolvency Act from PGB Timmins Holdings LP, an investment vehicle controlled by Pandion Mine Finance LP, due to alleged defaults by Gowest on all its obligations under the prepaid forward gold purchase agreement meant to fund the development of its 100% owned Bradshaw gold deposit in the North Timmins gold project in Canada.
PGB has terminated the agreement entered into on Dec. 16, 2016, and demanded an early termination fee of US$25.5 million. PGB is not permitted to take any actions to enforce of its security for at least 10-days from the date.
Gowest said that it does not agree with PGB on the termination fee calculation, and is considering all actions available to respond to the notices.
Gowest said that PGB has funded only US$5.6 million of the aggregate US$17.6 million originally contracted under the agreement.