Allied Nevada Gold Corp. Files For Chapter 11 Bankruptcy Protection

Morris James LLP

On March 10, 2015, Allied Nevada Gold Corp. and thirteen (13) affiliates filed voluntary chapter 11 petitions in Delaware.  The petition lists approximately $941.2 million in total assets and $663.7 million in total debts.  The case has been docketed as case no. 15-10503, and has been assigned to The Honorable Mary F. Walrath.

According to the Declaration of Stephen M. Jones, CFO of Allied, filed in support of the petitions, the debtors are gold and silver producers engaged in mining, developing and exploring properties in the State of Nevada.  They operate primarily through Allied and its wholly owned subsidiary Hycroft Resources and Development, Inc.

As of the bankruptcy filing, according to the Jones Declaration, the debtors had total principal outstanding funded indebtedness of (i) $75 million of borrowings and issued letters of credit under their credit agreement (ii) $58.3 million under a term and security deposit loan agreement, $5.1 million under a “Jacobs Promissory Note” (as defined in the Declaration) and $400 million under the Senior Notes (as defined in the Declaration).  The debtors also have various capital lease obligations and trade debt.

The Declaration cites decreasing gold and silver prices, an overleveraged capital structure, exposure under certain cross currency swaps, and capital requirements and delay regarding the Hycroft Mill Expansion Project as reasons leading to the filings.

The debtors hope to reorganize under a pre-arranged plan and restructuring support agreement reached with certain consenting holders of Senior Notes.

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Morris James LLP

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