Executive chairman Mark Haywood said Cline, which has a flagship operation in Colorado, was not able to make its June 17 interest payment of about $C3.2 million.

“[We have] agreed with the trustee to forbear from taking action under the trust indenture until the end of this month whilst an alternative financing arrangement is negotiated with Marret Asset Management,” Haywood said.

He noted the semi-annual interest payment on its outstanding $65.5 million in 10% senior secured bonds was missed due to Cline's “present financial situation”

Under the agreement, the trustee has agreed to forbear any action until the end of this month so long as Cline continues to proceed with the alternate financing with Marret.

Last week, Cline said it would be delisted from the TSX at the close of trading on June 21.

Meanwhile, despite its previous announcement that it had been placed under remedial listing review by the exchange, the review has been deferred pending the completion of a proposed rights offering.

On June 3, Cline said the rights offering would not proceed, and it decided to voluntarily relist.

“At the present time, continued listing on the TSX is not feasible for Cline and does not fit with its current business strategy,” Haywood said last week.

“The company expects that after delisting it will have additional flexibility with respect to financing options.”

Earlier this month, Cline chief financial officer Earnest Cleave and chief operating officer David Stone both tendered their resignations and have left the company.