Midlands Minerals Corporation (“Midlands” or the “Company”) announces that it has agreed to sell, through its wholly-owned subsidiary, Harbour Capital Corporation (“HCC”), its 130,000,000 shares (the “Shares”) of Akroma Gold Company (“Akroma”) to its joint venture partner Sian Goldfields Limited (“Sian”) for an aggregate purchase price (the “Purchase Price”) of US$3.4 million (the “Transaction”).
Akroma is the joint venture company holding title to the Sian Mining Lease for the Sian gold project (the “Sian Gold Project”) located in the Eastern Region of Ghana.
Midlands announced on May 31, 2012 that it had received a directive from the Minerals Commission of Ghana (the “Commission”) to communicate a resolution to the Commission in respect of pending issues with Sian regarding the Sian Gold Project. Subsequent to the press release of the Company on November 5, 2012 regarding its ongoing negotiations with Sian, Midlands has now entered into a binding term sheet with Sian whereby the Shares will be sold to Sian on terms and conditions to be more particularly described in a definitive agreement (the “Definitive Agreement”) to be entered into between HCC, Midlands and Sian. The execution and delivery of the Definitive Agreement will be a condition to the closing of the Transaction, which is expected to occur after the Company’s annual and special meeting of shareholders.
The Shares held by the Corporation represent 65% of the issued and outstanding shares of Akroma. The balance of the issued and outstanding shares of Akroma, being 70,000,000 shares (the “Remaining Shares”), is owned by Sian. Sian has acknowledged and agreed that if the Definitive Agreement is not fully executed by June 21, 2013 and payment of the balance of the Purchase Price has not been completed to the satisfaction of HCC, Sian will sell the Remaining Shares to HCC, on the same valuation terms as negotiated between the parties with respect to the Shares.
A non-refundable deposit of US$340,000 has been paid by Sian to Midlands, to be held in escrow pending execution of the Definitive Agreement, subject to certain required approvals to be obtained for the Transaction including approval from the Company’s board of directors, the Commission, the TSX Venture Exchange (the “TSXV”) and the Company’s shareholders. The balance of the Purchase Price will be paid upon execution of the Definitive Agreement, to be held in escrow pending closing of the Transaction.
Craig Pearman, President and CEO of Midlands stated that “We are encouraged by the recent developments with the Sian gold project negotiations and the commitment shown by our joint venture partners, and we continue to explore every opportunity to resolve the impasse commercially and to return the company to full strength.”
In accordance with the policies of the TSXV, the common shares of the Company were halted from trading on June 3, 2013 and will remain halted until further notice.
As indicated above, completion of the Transaction is subject to a number of conditions, including shareholder approval. There can be no assurance that the Definitive Agreement will be entered into or that the Transaction will be completed on the terms contemplated in such agreement, or at all.
Tanzania Update:
Pursuant to the Company’s continued efforts to reduce costs and conserve working capital, Midlands is divesting its assets in Tanzania. Midlands has expended resources to evaluate the exploration potential of its greenfields properties in Tanzania, but is no longer in a position to carry a large land package without a clear exploration plan. Midlands made a significant effort over the last year to sell or joint venture these assets, but was unable to conclude any agreements and consequently is divesting its assets by returning the properties to their vendors.
Source: http://www.midlandsminerals.com/