Argonaut Gold Inc signed a definitive agreement last Friday for the sale of its Ana Paula gold development project, located in Mexico’s so-called gold belt, in the state of Guerrero.
Total consideration toincludes: US $ 30 million at closing; Canadian 10 million upon the announcement of the start of construction; 1% net smelter return royalties, and 9.9% of the acquiring company’s outstanding common shares, which will be formed by a business combination of AP Mining and Pinehurst Capital II Inc.
Argonaut Gold entered into a definitive agreement with AP Mining dated September 10, 2020 (the Argonaut Agreement) for the sale of all the issued and outstanding shares of Aurea Mining Inc. and its wholly owned subsidiary Minera Aurea SA de CV (Owner of the Ana Paula Project).
AP Mining, in turn, has entered into a definitive agreement with Pinehurst dated September 10, 2020 (the AP Mining Agreement), pursuant to which Pinehurst and AP Mining have agreed to complete a business combination, whereby Pinehurst is the parent company and 100% of AP Mining’s issued and outstanding securities will be owned by the resulting Issuer, conditional on AP Mining completing the acquisition of the Ana Paula Project in accordance with the terms of the Argonaut Agreement.
Under the terms of the Argonaut Agreement, AP Mining will acquire all the issued and outstanding shares of Aurea Mining Inc. and its wholly owned subsidiary Minera Aurea S.A. de C.V. for an aggregate purchase price composed, in part, of US $ 30 million in cash at closing, a promissory note in the amount of C $ 10 million payable on the date the resulting Issuer announces the start of construction of the Ana Paula Project , 1% net of the smelter returns royalties and a number of common shares of the resulting Issuer that is equal to 9.9% of the outstanding common shares of the resulting Issuer immediately after the completion of the qualified Transaction.
The closing of the transactions set forth in the Argonaut Agreement is subject to a number of conditions, including regulatory approval, approval by TSX Venture, approval of the Qualified Transaction, and successful completion of the capital raising in connection with the Qualified Transaction. .