Vancouver-based Baja Mining Corp. (TSX:BAJ) announced this morning that it has obtained a 45-day standstill agreement from its lenders with regards to project financing of its Minera y Metalúrgica del Boleo S.A. de C.V. (MMB) subsidiary.
This follows yesterday’s news that one of Baja’s largest shareholders is suing the company and demanding an independent investigation into cost overruns at its Boleo project. (See “Shareholder sues Baja Mining for late cost overrun disclosure”– June 19.)
In this morning’s news release, Baja said that under the standstill agreement “the lenders agreed to refrain from exercising rights and remedies under the Boleo project financing agreements until August 1, 2012, with respect to certain defaults and events of default that are currently outstanding or that may arise during the standstill period.”
The company further announced that, in response to a cash call from MMB, Baja has provided US$14.7 million and a Korean consortium provided $US6.3 million to the Boleo project.
“This cash injection will enable MMB to continue its current level of critical path activities at the Boleo project, including all contractors continuing to work on the copper circuits,” the company said.
According to Baja, the cash will sustain the project through August 1, 2012.
“As a result of the standstill and the funding of MMB by its shareholders and with the support of lenders, project partners, financial advisers and vendors, Baja has additional time to identify and evaluate potential financing options and possible sources of funding,” the company said.
