TORONTO, April 07, 2022 (GLOBE NEWSWIRE) — Belo Sun Mining Corp. (“Sun Belo“or the”Company”) (TSX: BSX; OTCQX: BSXGF) is pleased to provide a corporate update.
Court of Appeals Update
Belo Sun is pleased to announce that the Federal Court of Appeal of Justice of Brasilia (Tribunal regional federal da 1ª Região – TRF1) has set April 25, 2022 as the date for the hearing of oral arguments in the cases involving Belo Sun relating of the skill of the Search.
The two cases before the Court will be (i) the determination of the competent authority for the environmental authorization of the Volta Grande Gold project (SEMAS or IBAMA) (see press release of July 12, 2019, link: Belo Sun Mining Corp: News ); and (ii) rule on the stay order against the Volta Grande Construction License (see press release dated December 6, 2017, link: Belo Sun Mining Corp: News Releases).
Suspension of building permit (LI)
The request to lift the suspension was filed by Belo Sun in early 2022 after the completion in 2021 of the required indigenous consultation meetings with the approval of the indigenous communities and in accordance with FUNAI (Fundação Nacional do Indio – Brazilian Federal Ministry Aboriginal Affairs). international) for the ECI (Estudo do Componente Indígena – Indigenous Study). This request was based on the final documentation from FUNAI published at the end of 2021 informing SEMAS that the ICE was finished.
SEMAS or IBAMA Authority
The history of this case relates to a September 2018 decision by the Federal Judge of Altamira ruling that IBAMA (Federal Licensing Authority), instead of SEMAS (State Licensing Authority), is the Competent Authority for environmental clearance of the Volta Grande Gold Project. This decision was suspended by the Court of Appeal of Brasilia (TRF1) determining that SEMAS should remain the competent authority until the final judgment of the case (see press release of July 12, 2019, link: Belo Sun Mining Corp: News).
The Federal Justice Court of Appeal in Brasilia should first issue a decision on the appropriate licensing authority (SEMAS or IBAMA), followed by a decision on the suspension of the building permit.
Brazilian Investment Partnership Program
The Company continues to work with the Investment Partnership Program of the Brazilian Government’s Ministry of Mines and Energy (see press release dated December 3, 2021) which promotes interaction between public bodies and private sectors regarding projects considered as national priorities. In fact, Volta Grande will bring broad economic benefits, support local communities and be managed in an environmentally responsible manner, making it a sustainable and dignified project.
Belo Sun is expecting, and has seen, the reaction of various groups opposed to the projects being set up in the Amazon region, including the Volta Grande Gold Project. Nevertheless, the Company considers this to be a normal part of the authorization process.
Modification of the promissory note
As announced in its press release dated April 23, 2018, the Company previously provided a series of unsecured loans to certain officers and directors to support the private purchase of common shares of the Company from a major corporation. outgoing shareholder with the aim of ensuring orderly management and a stable market for the common shares on the Toronto Stock Exchange and to further align the interests of these supporting directors with the Company (please refer to the press release dated April 23, 2018 for more details). Each loan was evidenced by a promissory note (each a “Promissory note”) bearing interest at the LIBOR rate + 1% per annum payable annually and maturing on April 23, 2020. The directors and officers have repaid the loan in full with interest with the exception of Mr. Tagliamonte (being a director and president of the Company and chief management) including the promissory note with a face value of $4,332,550 (the Rating Tagliamonte”) remained in abeyance.
On April 23, 2020, the Company entered into an amending agreement whereby it undertook to modify the terms of the Tagliamonte note to postpone the maturity date to April 23, 2022 and to adjust the interest rate on the unpaid amount at a rate equal to LIBOR per annum (please refer to our press release of April 24, 2020 for more details).
To date, Mr. Tagliamonte has made principal and interest payments of $760,736 (including the interest payment due in 2022), resulting in an outstanding principal amount of $3,916,644 under the Tagliamonte ticket on the date hereof.
Following discussions between the Board of Directors of the Company (the “Plank“) and Mr. Tagliamonte, the Company has agreed to further amend (the “Second Amendment”) the terms of the Tagliamonte note effective April 23, 2022 to extend the maturity date of the loan by an additional six months, resulting in a new maturity date of October 23, 2022. The interest rate remains at LIBOR per year. The Company currently has no intention of further extending the maturity of the Tagliamonte Note and the Company understands that Mr. Tagliamonte may be required to sell some or all of the Common Shares acquired with the proceeds of the Tagliamonte Note to fund reimbursement of amounts due to the Company no later than its new due date. The coming into force of the Second Amendment was reviewed and approved by the Board of Directors with the exclusion of Mr. Tagliamonte who declared a conflict and withdrew from the vote with respect to the Second Amendment. The remaining trustees voted unanimously to approve the Second Amendment.
In accordance with Multilateral Instrument 61-101 – Protection of holders of minority securities in special transactions (“MI 61-101”), the Second Amendment’s conclusion with Mr. Tagliamonte is a “related party transaction.” The Company is exempt from the requirement to obtain a formal valuation or minority shareholder approval under the Second Amendment pursuant to Sections 5.5(a) and 5.7(a), respectively, of NI 61-101, as neither neither the fair market value of the Second Amendment subject matter nor the fair market value of the Second Amendment consideration exceeds 25% of the Company’s market capitalization, as calculated in accordance with NI 61-101. Due to ongoing discussions among Belo Sun’s independent directors, the Second Amendment was not approved until April 7, 2022, less than 21 days before the Second Amendment’s effective date.
About Belo Sun Mining
Belo Sun is a Canadian-based mining company with a portfolio of gold-focused properties in Brazil. The Company is currently focused on the development of the Volta Grande Gold Project. Belo Sun trades on the Toronto Stock Exchange under the symbol “BSX” and on the OTCQX under the symbol “BSXGF”. For more information, please visit www.belosun.com or contact Investor Relations at +1 416 861-2262
Caution Regarding Forward-Looking Information:
This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws. Forward-looking information includes, but is not limited to, statements regarding cases to be heard by the Federal Court of Appeals of Brasilia; the extension of the Tagliamonte promissory note; provides that Mr. Tagliamonte sells shares of the Company; the Company’s work with the Brazilian Government Ministry of Mines and Energy Investment Partnership Program and the resulting terms and commitments. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to differ materially from those expressed or implied by such forward-looking information, including the risks inherent in the mining industry and the risks described in the Company’s public disclosure which is available under the Company’s profile on SEDAR at www.sedar.com and on the Company’s website at www.belosun.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that cause results not to be those anticipated, estimated or expected. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws.