Caldas Gold Corp. reports that it has signed a definitive agreement (the “Acquisition Agreement”) according to which Caldas Gold will obtain all of the issued and excellent shares of privately held South American Resources Corp (SARC).
This agreement will be effected through a three-pronged amalgamation between Caldas Gold, SARC, and a wholly-owned subsidiary of Caldas Gold (the Transaction).
As per the terms of the Acquisition Agreement, 20 million common shares of the Company (or the Consideration Shares) will be issued by Caldas Gold to the existing shareholders of SARC.
A few shareholders of SARC have signed voluntary lock-up agreements with SARC according to which such security holders, with around 87% of the Consideration Shares, have accepted to voluntarily lock-up their Consideration Shares for 2 years from the transaction closing date.
SARC has partaken an acquisition agreement in accordance to which SARC will obtain a few mining explorations resources in Northeastern Ontario (the Juby Acquisition) from Lake Shore Gold Corp. (LSGC), a fully owned subsidiary of Pan American Silver Corp. The mining exploration assets include a 100% interest in the Juby Project.
SARC is also a party to an acquisition agreement according to which it will obtain a 25% joint venture interest from LSGC in specific claims adjacent to the Juby Project (the Knight JV Acquisition).
The transaction completion is conditional on, apart from other things, the completion of the Knight JV Acquisition and the Juby Acquisition by SARC. Caldas Gold will be accountable for financially supporting the cash payment of US$9.5 million to LSGC upon closure of the Juby Acquisition and the cash payment of US$0.5 million to LSGC upon closure of the Knight JV Acquisition.
The Juby Project, which is an advanced exploration-stage gold project, is situated in Ontario, Canada, around 15 km west-southwest of the Gowganda town and 100 km south-southeast of the Timmins gold camp inside the Shining Tree region in the southern part of the Abitibi greenstone belt.
More than 14,000 acres are held via the patented claims of the Juby Project that covers 10 km strike length on the mineralized trend.
The board of directors of both SARC and Caldas Gold has unanimously approved the Transaction. Gran Colombia Gold Corp. is expected to seal a private placement with Caldas Gold before the Transaction is closed to finance the completion of the Knight JV Acquisition and the Juby Acquisition.
The Transaction closing is contingent upon conventional closing conditions for such a transaction, which include, apart from other things, the listing of the Consideration Shares on the TSX Venture Exchange (TSX-V). It is expected that the Transaction will be closed by June 15th, 2020.
Caldas Gold will file a copy of the Acquisition Agreement with the Canadian securities regulators, which can be viewed on the Company’s profile on SEDAR. Also, a report of the Acquisition Agreement will be set forward in Caldas Gold’s material change report that will be filed on SEDAR.