Resignation of Jhinson Machuca from Board of Directors, Legal Proceedings Involving Ecuadorean Partner
October 09 2009 - 2:33PM
Marketwired
Further to our last Press Release of September 8th, 2009, when C2C
Gold Corporation Inc. (TSX VENTURE: CCN) announced arbitration
proceedings in Ecuador with Andres David Machuca Granda,
representing our Ecuadorean JV Partner, Minera Beloro, in order to
resolve our differences, we have to unfortunately report that we
have been unable to reach a positive settlement of our differences.
Payment of $1,200,000 US dollars as of July 31st, representing
production net profit share due to C2C Ecuador by virtue of our JV
Agreement, still unpaid and outstanding since February, is now
unlikely to be voluntarily paid by our JV Partner. Furthermore, our
JV Partner has put C2C Ecuador into default when we refused to pay
$200,000 US dollars due to Mr. Andres David Machuca Granda under
the terms of the JV Agreement. Instead of going into arbitration to
resolve our differences, as per terms and conditions of our
Agreement, our local partner decided unilaterally to terminate the
JV as of September 6th. During the past months, we have been
attempting to reconcile our differences, but to no avail from our
partner.
Given the lack of collaboration on the part of Andres David
Machuca Granda, de facto owner of the mine, his nephew Jhinson
Machuca Loaiza, has decided to resign from the Board of Directors
of C2C Gold, as of September 30th, 2009. His resignation was
accepted, and we informed him that we understood his motivations,
namely fear of legal action against him personally, he would
nevertheless be liable as a Board Member, should there be any
action taken against him, being a related party to our JV
Partner.
On Monday October 5th, we have sent a team of representatives of
our strategic investors to Ecuador as our "ambassadors" who could
potentially resolve the impasse, but again this effort has been
fruitless. After two days of negotiations in Ecuador, Andres David
Machuca Granda was not receptive to consider any settlement or new
Agreement.
Because of the lack of collaboration and actions on the part of
Andres David Machuca Granda, our negotiations with European
investors to subscribe to the Gold Loan previously announced, are
terminated. We are now constrained to initiate legal proceedings
against Minera Beloro and against Andres David Machuca Granda.
We will seek the full powers of the legal system, in both
Ecuador and Canada, to recuperate our investment and will obtain
compensation for damages inflicted, the whole in order to fairly
represent the interests of our shareholders.
Separately, we are conducting an internal inquiry into the role
and responsibility, if any, of the previous President and CEO as
well as Machuca's advisors, to determine if their actions may have
been irremediably detrimental to the rapid deterioration of the
situation.
In light of the foregoing, this will inevitably seriously impact
the cash flow of C2C in the short term, but current management has
already identified other high valued properties which could be
acquired in a near future. C2C will soon announce a hard cash
financing in order to stabilize its financial position and move
forward with other projects.
About C2C
C2C is an active gold producer working in southwestern Ecuador
through a Joint Venture exploiting the Paraiso-Pambil gold
mine-mill complex.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further information, please join us on a Conference Call
initiated by our Chairman Louis Lessard scheduled on Tuesday,
October 13th at 9:00 EST.
Dial-In number: (514) 392-3301 or +1 (866) 392-3211 conference:
9654556#
Contacts: C2C Gold Corporation Inc. Robert Seguin President and
Chief Operating Officer 1-418-781-0272
Robert.seguin@c2cgoldcorporation.com C2C Gold Corporation Inc.
Jean-Francois Lemay Corporate Development & Investor Relations
1-514-214-8388 www.c2cgoldcorporation.com
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