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Midway Gold Chapter 11 Bankruptcy Petition Filed

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Midway Gold and 12 direct and indirect subsidiaries filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Colorado. The Company intends to restructure its business by attempting to sell non-core assets and resolving various challenges relating to its main asset: the Pan Mine project. Midway Gold is represented by Harvey Sender of Sender Wasserman Wadsworth.

According to a corporate release, Midway Gold will also seek ancillary relief in Canada pursuant to the Companies’ Creditors Arrangement Act in the Supreme Court of British Columbia in Vancouver, Canada.

Documents filed with the SEC explain, “MDW Pan LLP, as borrower (‘MDW’), under a credit agreement  with Commonwealth Bank of Australia (‘CBA’) and a group of initial lenders named in the Credit Agreement for the purpose of establishing an aggregate $53 million senior secured credit facility consisting of, (i) a $45 million project finance facility (‘Project Finance Facility’) and (ii) a $10 million cost overrun facility (the ‘Overrun Facility’ together with the Project Finance Facility is collectively referred to as, the ‘Debt Facilities’). The Debt Facilities are secured by substantially all of the assets of the Debtors, including MDW, which consists solely of the Debtors’ Pan gold project (the ‘Project’).”

SEC documents continue, “Midway Gold and certain of its subsidiaries entered into a security agreement (the ‘CBA Security Agreement’) by and between CBA, MDW, the Debtors and certain of its subsidiaries as grantors, pursuant to which the grantors granted to CBA for the benefit of the Secured Parties (as defined in the Credit Agreement) a security interest in the grantors’ right, title and interest in and the collateral identified in the CBA Security Agreement. MDW, as borrower, under a subordinated credit agreement (the ‘HCP Credit Agreement’) by and among MDW, Hale Capital Partners, (HCP), as administrative agent and collateral agent, HCP-MID, as a lender, and INV-MID, as a lender, for the purpose of establishing a subordinated secured non-revolving term credit facility in favor of MDW in the aggregate amount of $10,500,000 (‘Subordinated Debt Facility’).”

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