Revelo Resources Corp. is pleased to announce that it has signed a Letter of Intent ("LOI") with Austral Gold Ltd, allowing Austral to purchase Revelo's gold-silver projects at San Guillermo and Reprado located in northern Chile, in exchange for common shares in Austral and a royalty on future production from the projects.
The agreement is subject to due diligence and the signing of definitive documentation in Chile within 90 days and regulatory and exchange approvals. The LOI allows Austral to gain a 100% interest in the San Guillermo and Reprado projects in exchange for:
- 10,000,000 common shares in Austral, currently valued at approximately C$1.5M;
- A value cap of US$2.11M will be applied to the transaction, and the number of shares correspondingly reduced should AGLD's volume-weighted average market price ("VWAP") on the Toronto Venture Exchange (TSX VENTURE:AGLD) for the twenty (20) trading day period ending on the last trading day immediately prior to the Completion Date, cause the value of the transaction to exceed this amount;
- 1% NSR Royalty on future production at Reprado; and
- 0.5% NSR Royalty on future production at San Guillermo.
The existing Option, Sale and Royalty Agreement between Revelo and Austral relating to the San Guillermo project (See Company's news release dated February 8, 2016) will be cancelled concurrent with the signing of the definitive sale agreement. Austral will also assume responsibility for paying underlying NSR production royalties at San Guillermo to Minera Fuego and SQM in Chile, and an underlying NSR production royalty at Reprado to Teck in Chile.
Tim Beale, President and CEO of Revelo, commented: "This is an important development for Revelo as it shows how we plan to advance the Company's portfolio by identifying distinctive strategies for each of our projects. Austral is a dynamic, junior precious metals producer, with significant potential for growth in Chile and Argentina. Revelo is now linked to Austral's future success, and we believe that further collaborations may be possible in the future."