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Nordic Gold takes critical step in restarting production at Laiva project as it reaches agreement with Pandion Mine Finance

The firm settled its outstanding C$63.4 million liability for a total consideration of US$24.6 million payable over the following 24 months

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The move is a key step in enabling Nordic Gold to restarting production at its Laiva mine in Finland

Nordic Gold Inc (CVE:NOR) revealed Monday that it has finalized an agreement with Pandion Mine Finance, a critical step in returning the exploration company to positive cash flow.

The Vancouver-based company said it had settled its outstanding C$63.4 million liability for a total consideration of US$24.6 million payable over the following 24 months.

The move is a key step in enabling Nordic Gold to restarting production at its Laiva mine in Finland.

READ: Nordic Gold shifts its board and management as it aims to push Finland project forward

The settlement was a key priority of Nordic Gold’s new management team, which has been working closely with Pandion over the last three months, according to CEO Brian Wesson.

"Finalizing this agreement with Pandion and stabilizing the company has taken some time,” Wesson acknowledged in a statement. “However, it opens the door for the company to focus on returning to positive cash flow and building shareholder value.”

The operations restart will be controlled and focused on ensuring that necessary technical work is completed, Wesson told investors.

New York-based Pandion provided Nordic Gold with around US$5 million for Laiva’s care and maintenance over the last three months and to pay down liabilities on the company’s balance sheet.

The agreement sees Pandion providing an additional US$900,000 for working capital purposes.

Under the terms of the agreement, Nordic Gold will pay US$1.56 million in equity on the completion of a C$7 million raise or pro rata on each subsequent tranche. Two additional payments of US$11.5 million are due 18 and 24 months following the agreement date.

The agreement also sees the cancellation of gold deliveries to Pandion, and the consolidation and forgiveness of the prepaid forward gold purchase agreement and maintenance loan agreement on payment of the full settlement.

In the statement, Nordic Gold said it was “encouraged” that Pandion demonstrated its support of the company by agreeing to receive the first tranche of funds by participating in future capital raises.

As a result, the firm will only make a cash payment to Pandion in 18 months, allowing it to restart production before any payment is due.

Shares of Nordic Gold rose 14.2% in Toronto on Monday afternoon at C$0.04.

--Updates share price-- 

Contact Angela at angela@proactiveinvestors.com

Follow her on Twitter @AHarmantas

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Price: 0.035 CAD

TSX-V:OTSO
Market: TSX-V
Market Cap: $8.61 m
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