i-80 Gold Corp. Moves Forward with Proposed Convertible Debenture Amendments

i-80 Gold Corp. Proposes Amendments to Convertible Debentures

i-80 Gold Corp., a prominent mining firm focused on Nevada, recently revealed its intentions regarding amendments to its convertible debentures. The goal of these proposed changes is to bolster the company's recapitalization efforts, a crucial step towards enhancing its financial standing in the competitive mining sector.

On January 13, 2025, the company announced a significant agreement with key holders of its convertible debentures. By addressing various concerns raised by investors, i-80 Gold aims to embark on the second phase of its recapitalization plan, which is expected to be finalized by the end of the first quarter of 2025. This strategic move is crucial, especially in a market environment that poses numerous challenges.

Background on the Convertible Debentures

The need for these amendments stems from a previous private placement offering worth $65 million, which occurred on February 22, 2023. This offering was structured under an indenture agreement with the TSX Trust Company, allowing investors to participate in the company's growth while minimizing risk.

After the initial offering, debenture holders collectively appointed a committee to oversee decisions that affect their interests, demonstrating a proactive approach to governance. This committee has since worked closely with the company to evaluate and negotiate potential changes to the terms of the debentures.

Proposed Amendments in Detail

The recent agreement outlines three main amendments:
1. Revised Conversion Price: The first adjustment involves recalibrating the conversion price applicable to the conversion of outstanding interest, tying it to the volume-weighted average price of i-80 Gold's shares traded on the Toronto Stock Exchange, adjusted by a 15% discount. This provides an enticing opportunity for investors seeking to convert their holdings into equity at a favorable rate.
2. Security Adjustments: The second amendment seeks to clarify the security position of debenture holders by removing the company's ability to grant pari-passu security against its McCoy-Cove property. This ensures that convertible debenture holders maintain a senior secured position, offering them heightened protection against potential future liabilities.
3. New Redemption Rights: Lastly, a new redemption mechanism has been proposed, allowing the company the option to buy back the debentures for cash at a premium of 104% of the outstanding principal plus accrued interest. This flexibility is anticipated to assist i-80 Gold in navigating its recapitalization plan more effectively.

Strategic Implications

The moves outlined in the agreement significantly illustrate i-80 Gold's commitment to enhancing its financial portfolio while maintaining a collaborative relationship with debenture holders. CFO Ryan Snow expressed optimism, stating that the agreement represents a mutually beneficial outcome for both the company and its investors.

He noted, "This agreement is a win-win for both parties, as debenture holders were seeking adjustments to the existing conversion option and security position, and i-80 Gold was pursuing greater flexibility in executing its recapitalization plan."

The company is optimistic about leveraging its high-grade gold projects in Nevada to boost its status as a mid-tier gold producer in the competitive mining landscape.

Next Steps

While these proposed amendments represent a positive step forward, they remain subject to approval by the committee as well as by the TSX and NYSE American. Following approvals, i-80 Gold is poised to enter into a supplemental indenture reflecting these changes, further solidifying its foundation for future growth.

With a comprehensive strategy in place, i-80 Gold aims to navigate the complexities of the mining industry and emerge as a stronger competitor, capable of unlocking the full value of its promising gold properties in Nevada. As they work towards completing these amendments, stakeholders are keenly observing how these changes will shape the company's trajectory in the coming quarters.