Maudore Reaches Agreement for Additional Funding

MONTREAL, March 14, 2014 /CNW Telbec/ - Maudore Minerals Ltd. ("Maudore" or the "Company") - (TSXV: MAO) (OTCBB: MAOMF) (FWB: M6L) - announces that it has reached an agreement with Cyrus Capital Partners, in its capacity as a manager to FBC Holdings S.à.r.l ("FBC"), for additional funding to be made available by FBC to Maudore and to its wholly-owned subsidiary Aurbec Mines Inc. ("Aurbec").

Maudore and Aurbec had earlier reached agreements with FBC and with their other major creditors (the "Other Creditors") regarding the consensual restructuring of their debts. However, it became necessary to revise the terms of this consensual restructuring and to discontinue Maudore's associated rights offering mainly as a consequence of the Company having projected an increase in the time and development costs required for new stoping at the Sleeping Giant mine, elements that were not reflected in its initial payment schedules. The primary driver for this change was the positive drill results obtained from ongoing underground diamond drilling being conducted. The Company has successfully achieved its initial drilling plan goals and exceeded new ounce growth targets. However, the majority of these new ounces were revealed to be proportionally in the deeper levels of the mine. As a consequence, additional mine development and extended ramp up time is needed for these new stoping areas to reach positive cash flows, resulting in a significant change to the overall financing needs of the Company in order to bridge its operations to that point.

The Company continues to work towards a revised consensual restructuring of its debts (the "Consensual Restructuring") in order to arrive at a sustainable financing plan for developing the full potential of the Sleeping Giant mine. As an important first step in this regard, the Company has reached an agreement with FBC (the "FBC Agreement") which provides it with access to additional funding to be applied towards this goal.

The specific terms of the FBC Agreement are as follows:

Immediate Funding

Upon the execution of definitive documentation by the parties, FBC will immediately advance to Aurbec the sum of $4 million in the form of a senior secured loan (the "Senior Secured Loan"), with the funds to be used by Aurbec for general corporate purposes until such time that a meeting of the shareholders of Maudore can be convened in order to obtain the approval of the shareholders other than FBC (the "Minority Shareholders") to the overall terms of the FBC Agreement as discussed below. The Senior Secured Loan will bear interest at the rate of 15% per annum and will be secured by a first charge on all assets of Aurbec (subject to the prior charge on the Vezza property in favour of Entrepreneur Minier Promec Inc. and Gestion Abitibi Inc.) as well as a secured guarantee provided by Maudore (the "Senior Security"). Aurbec will pay a fee of 5% on any undrawn amounts.

FBC will also continue to allow Maudore to draw on the balance remaining of the original amount of approximately $3.3 million held in the interest escrow account established pursuant to the existing $22 million secured credit facility granted to Maudore by FBC (the "Credit Facility"). These funds will be used for general corporate purposes, subject to the prior approval of FBC. FBC has been allowing Maudore to access these funds for working capital purposes since the time that the Company discontinued its rights offering.

Should the Minority Shareholders not approve the terms of the FBC Agreement, this would constitute a default under the Senior Secured Loan, rendering it immediately repayable to FBC, and would similarly create a default under the Credit Facility.

Other Features Subject to Shareholder Approval

Upon the approval of the Minority Shareholders of the terms of the FBC Agreement as discussed below, the following additional elements of the FBC Agreement will be implemented:

• FBC will pay to Aurbec the sum of $4 million, which sum will be applied by Aurbec to the repayment of the then outstanding balance of the Senior Secured Loan described above, with the remaining balance available to be used for general corporate purposes. In exchange for this $4 million payment, (i) Aurbec will issue to FBC such number of common shares in its share capital as will result in FBC holding a 49.9% equity interest in Aurbec (with Maudore retaining a 50.1% equity interest) and (ii) Aurbec will grant to FBC a royalty claim (the "Royalty Claim"). Under the terms of the Royalty Claim, Aurbec will be required to pay to FBC, within one year, the sum of $4 million plus interest at the rate of 15% per annum. Repayment of the Royalty Claim will be made by Aurbec through a combination of the following sources of cash: (A) 1% of any gold sales generated by Aurbec and (B) any cash balances in excess of $1 million (which excesses will be deposited into a blocked account in favour of FBC and be balanced on a bi-weekly basis). Moreover, in the event of a change of control of Maudore or Aurbec (other than in favour of FBC), the Royalty Claim will become immediately repayable at the option of FBC for an amount equal to 101% of the amount otherwise payable thereunder at such time. The obligations of Aurbec under the Royalty Claim will be guaranteed by Maudore and secured against the assets of Maudore and Aurbec.
  
  
• FBC will make available to Aurbec the sum of $2 million in the form of a senior secured loan, with the funds to be used by Aurbec for general corporate purposes, subject to the prior approval of FBC. This senior secured loan will bear interest at the rate of 15% per annum and will be secured by the Senior Security. Aurbec will pay a fee of 5% on any undrawn amounts.
  
  
• FBC will provide funding sufficient to satisfy Aurbec's new environmental bonding requirements in 2014 of approximately $0.9 million.
  
  
• The approximately $2.2 million in interest currently outstanding under the Credit Facility will be converted into principal under the Credit Facility.
  
  
• Maudore will be permitted to satisfy the ongoing interest owing on the Credit Facility for 2014 either by making cash payments or by converting such interest into principal under the Credit Facility.
  
  
• FBC will convert a minimum of $2 million and a maximum of $4 million (the exact amount to be determined by FBC at its option) of outstanding principal owing under the Credit Facility, or of other debt owing to it, into common shares of Maudore ("Common Shares") at a conversion price of $0.09 per Common Share, representing a minimum of 22,222,222 and a maximum of 44,444,444 Common Shares.
  
  
• Maudore will undertake not to issue any additional Common Shares without the approval of FBC prior to the implementation of the Consensual Restructuring.
  
  
• In consideration of this restructuring, Maudore will issue to FBC an aggregate of 15.35 million Common Shares.

The Boards of Directors of Maudore and of Aurbec have received an opinion from Clarus Securities Inc. regarding the terms and conditions of the FBC Agreement, stating that the FBC Agreement is fair to Maudore and to Aurbec from a financial point of view.

Discussions continue with the Other Creditors regarding the revisions to be made to the terms of the consensual restructuring initially entered into with them. Agreements have been reached with the Other Creditors of Aurbec which provide that an aggregate of approximately $3.3 million of debt will be repaid in monthly instalments of approximately $85,000, with a final balloon payment to be made in March 2015. Further announcements in this regard will be made as warranted.

The implementation of the FBC Agreement remains subject to the execution of formal documentation, the receipt of all requisite regulatory approvals, including the approval of the TSX Venture Exchange, and, except as stated above, the approval of the Minority Shareholders. Moreover, any further agreements that Maudore or Aurbec may enter into with the Other Creditors regarding the restructuring of their debt may be subject to similar conditions. Further information regarding these matters will be contained in a management proxy circular which will be mailed to shareholders in due course in connection with the meeting which will be called by the Company in order to seek their approval of the foregoing.

About Maudore

Maudore is a Quebec-based junior gold company in production, with mining and milling operations as well as more than 22 exploration projects. Five of these projects are at an advanced stage of development with reported current and historical resources and mining. Currently, gold production is ramping up at the Sleeping Giant mine. The Company's projects span some 120 km, east-west, of the underexplored Northern Volcanic Zone of the Abitibi Greenstone Belt and cover a total area of 1,570 km², with the Sleeping Giant Processing Facility within trucking distance of key development projects.

Cautionary Statement Regarding Forward-Looking Statements

This release and other documents filed by the Company contain forward-looking statements. All statements that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "intend", "anticipate", "believe", "expect", "estimate", "plan" and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements include, without limitation, performance and achievements of the Company, business and financing plans, business trends and future operating revenues. These statements are inherently uncertain and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, financial related risks, unstable gold and metal prices, operational risks including those related to title, significant uncertainty related to inferred mineral resources, operational hazards, unexpected geological situations, unfavourable mining conditions, changing regulations and governmental policies, failure to obtain required permits and approvals from government authorities, failure to obtain any required approvals of the regulatory authorities or from shareholders or creditors, failure to obtain any required financing, increased competition from other companies many of which have greater financial resources, dependence on key personnel and environmental risks and the other risks described in the Company's continuous disclosure documents.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Maudore Minerals Ltd.

Greg Struble
President and Chief Executive Officer
Email: [email protected]
[phone]

George Fowlie
Deputy Chairman of the Board and Director of Corporate Development
Email: [email protected]
[phone]

Claudine Bellehumeur
Chief Financial Officer
Email: [email protected]
[phone]