Mandalay Resources Corporation Announces Completion of Revised Repurchase Offer and Consent Solicitation in Respect of 5.875% Secured Exchangeable Bonds

TORONTO, May 24, 2017 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX:MND) announced today that Gold Exchange Limited ("GEL"), an unaffiliated special purpose vehicle incorporated in Jersey, has entered into agreements with respect to a revised repurchase offer (the "Repurchase") and consent solicitation (the "Consent Solicitation") in respect of its U.S.$60,000,000 principal amount 5.875% secured exchangeable bonds due 2019 (the "Bonds").

GEL issued the Bonds in 2014 and loaned the proceeds to a subsidiary of the Company pursuant to the terms of a loan agreement and related funding agreement (the "Loan") which together mirror the principal terms of the Bonds.

As indicated in Mandalay's press release of May 12, 2017, the original repurchase offer and consent solicitation that GEL launched in respect of the Bonds on April 19, 2017 (the "Original Proposed Transaction") was not completed. However, GEL subsequently entered into discussions with Bondholders with respect to implementing alternative arrangements in respect of the Bonds substantially similar to the Original Proposed Transaction. The holders of 100% of the Bonds have now executed a written resolution approving the Repurchase and Consent Solicitation on the same terms as the Original Proposed Transaction except that the interest rate payable on the Bonds has been increased from 5.875% per annum to 6.875% per annum effective as of May 13, 2017. In addition, GEL has agreed to pay each Bondholder a fee equal to 1.0% of the aggregate principal amount of the Bonds held by it that are not repurchased pursuant to the Repurchase.

Pursuant to the Repurchase, GEL has agreed to purchase US$29,950,000 principal amount of the Bonds from the holders thereof at a price of 105% of their principal amount, plus accrued and unpaid interest at the rate of 6.875% per annum for the period from (and including) May 13, 2017 to (but excluding) May 26, 2017. The Repurchase is expected to be completed on May 26, 2017.

In connection with the Consent Solicitation, the following amendments have been made to the terms of the Bonds:

• extending the maturity date of the Bonds to May 13, 2022;
   
• deleting a condition of the Bonds that required that beginning on May 14, 2017, as additional security for the Bonds, GEL was required to start depositing into a custody account, the aggregate number of shares of the SPDR Gold Trust issuable upon exchange of the Bonds;