Last checked at 
(Alliance News) - Goldstone Resource Ltd on Wednesday said it had arranged a standstill agreement with Asia Investment Management Services Ltd regarding the pair's 2020 gold loan agreement.
The Ghana-focused gold producer and explorer entered into a borrowing agreement with AIMSL, its principal secured creditor, in June 2020.
AIMSL has now agreed not to initiate insolvency proceedings, and will temporarily defer its right to demand repayment for the duration of the standstill period ending June 2024.
A plan will be finalised between the two for the repayment of the outstanding amount as they review options for a turnaround plan of the company.
During the period, Goldstone will not be required to make payments under the gold loan agreement, but interest will continue to accrue on the outstanding amount at a rate of 14% per annum.
In an effort to raise the funds necessary for repayment, Goldstone has agreed to use "commercially reasonable endeavours" to secure investors and increase gold production. The company will also take steps to register the loan agreement with the collateral registry of the Bank of Ghana.
AIMSL maintains the right to terminate the standstill, should Goldstone fail to uphold any of the agreement's obligations.
AIMSL will be allowed to nominate a non-executive director to Goldstone's board, who will serve until the gold loan is fully repaid. Angela List and Bill Trewe have joined the company's board with immediate effect, serving as chair and non-executive director, respectively.
Shares in Goldstone have been suspended from trading on the AIM market since July 3, and readmission is contingent on publication of its full year 2022 and 2023 interim accounts.
The company said it is raising additional funding to settle balances before these results can be published, and is seeking to complete such arrangements by the end of February 2024.
Goldstone shares were last quoted at 2.15 pence each.
By Hugh Cameron, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.