Greenland Resources Inc. reports that it has signed a binding share purchase agreement with Cryptologic Corp. on January 27th, 2021, for the sale of 100% of the outstanding shares of Copenhagen Minerals Inc., Greenland Resources’ 100% owned subsidiary.
Copenhagen Minerals owns the Storø Gold Project, which is situated in southwest Greenland.
The management of Greenland Resources considers that the transaction will add up value to the company’s shareholders and will enable the company to concentrate on its flagship, best-in-class Malmbjerg molybdenum project located in east-central Greenland, while also helping toward the progress of the Storø Gold Project.
About the Storø Gold Project
The Storø Gold Project is situated nearly 40 km northeast of Nuuk, which is the capital state of Greenland. It is situated on the 12 km2 mineral exploration License No. 2014/11 and presents an inferred mineral resource of 885,000 tons at a grade of 3.4 g/t gold.
The Storø Gold Project is free of vegetation and overload, which streamlines exploration and attracts year-round property access for eventual mining and ice-free shipping.
Besides, there is a second huge mineral exploration License No. 2021-01 of 540 km2 surrounding License No. 2014/11, where the latest satellite-based spectral analysis survey described several other Storø-type exploration targets. Additionally, Copenhagen holds a mineral prospecting License No. 2020-62 encompassing the whole of the eastern third of Greenland.
Metallurgical studies carried out by SGS Ltd in Lakefield, Ontario, reveal recoveries of 91.5% to 94.8% from cyanide leach or gravitational separation. A few intersections of the Storø Gold Project include 4.11 g/t gold over 14.03 m in DDH 15-03; 12.0 m of 4.20 g/t in DDH 05-01; 20.0 m of 6.30 g/t gold in DDH 95-03; 23.9 m of 6.40 g/t gold in DDH 95-05; and 28.8 m of 6.74 g/t gold in DDH 10-54.
Terms of the Transaction
As per the Transaction, Cryptologic will have to make a payment of $0.25 million in cash and issue 37.6 million common shares of Cryptologic at a deemed issue cost of $0.24 for each share (the Consideration Shares).
According to an agreement with a resource structuring group, there is a right to obtain a part of the Consideration Shares and hire a new management team for the Storø Gold Project. Greenland Resources is expected to own 26% of Cryptologic upon closing and gain board representation. At present, Cryptologic has approximately $7.6 million of cash on hand.
Transaction completion is contingent upon customary conditions, such as receipt of relevant approvals by Greenland Resources and Cryptologic and all essential regulatory approvals, inclusive of the CSE approval.
Transaction closing is anticipated to take place after waiver or satisfaction of all closing conditions, such as receipt of relevant shareholder approval and the CSE approval, which is awaited in the second quarter of 2021.