Condor Gold Corp.

May 12, 2006 19:00 ET

Condor Announces Debt Settlements and Corporate Restructuring

TORONTO, ONTARIO--(CCNMatthews - May 12, 2006) - Condor Gold Corp. (PINK SHEETS:CDRGF) (the "Corporation") announces that it has completed debt settlement agreements with its major unsecured creditors with a view to cleaning up the Corporation's balance sheet. This will enable the Corporation to move forward with initiatives to conclude financing for the acquisition of new mineral assets and a new operating management for the Corporation. To meet these objectives, the Corporation has authorized the conversion of $2,258,564 in indebtedness held by eight of its major unsecured creditors. Conversion of this indebtedness was effected at CAD $0.0175 per share. The elimination of this indebtedness from the balance sheet is expected to enable the Corporation to conclude fresh financing arrangements, agreements for the acquisition of new mineral exploration assets and the engagement of an experienced and respected mining exploration team. The major creditors involved in the settlement of debt for shares are RTO Capital Corp., Alexander Stewart, Kirk Boyd, Gowling Lafleur Henderson LLP, Treelawn Investment Corp., Activation Laboratories Inc., Marlea Inc. and Currah and Sons Ltd. The conversion of indebtedness has resulted in the issuance of 129,060,799 common shares.

Treelawn Investment Corp. Secured Loan

The Corporation has been advised by its secured creditor Treelawn Investment Corp. ("Treelawn") that it intends to apply for an order granting foreclosure of the equity redemption in the Corporation's properties, which are secured in favour of Treelawn Investment Corp. Although up to date hereof, such an application has not been served, the Corporation believes that the process is imminent. In such event, this will result in all of the present assets of the Corporation becoming the property of Treelawn and an amount equal to the Corporation's secured loan to Treelawn ($2,279,087 as of March 15, 2006) would be removed as an indebtedness from the Corporation's balance sheet.

Future Plans

The removal of the Treelawn secured loan from the Corporation's balance sheet and the elimination of the unsecured indebtedness referred to above will enable the Corporation to proceed with current discussions which relate to the acquisition of new mineral exploration assets, an experienced mining management team and fresh equity financing. The Corporation was not able to file a material change report twenty-one days before the closing of the debt settlement agreement since the board and the creditors required that the transaction be effective immediately upon all of the settling creditors approving and signing the debt settlement agreement. This occurred effective May 12, 2006. It was also a requirement of the non-related unsecured creditors that all related party unsecured creditors agree to convert their indebtedness into shares. Further details on the foregoing matters are contained in the material change report of the Corporation dated May 12, 2006, a copy of which has been filed on SEDAR.

Contact Information

  • Condor Gold Corp.
    Alexander Stewart
    (416) 368-6161
    (416) 368-7805 (FAX)
    Condor Gold Corp.
    50 Richmond Street East, Suite 300
    Toronto, ON M5C 1N7