Mining company Victoria Gold Corp has entered into a deal to sell its local subsidiary, StrataGold Guyana Inc (SGI).
The company recently sealed the deal to sell its Guyana projects to Canadian mining company Takara Resources, a press release said. SGI holds two advanced stage gold projects here; the Tassawini gold project and the BRL Venture. Under the terms of the deal, Takara will issue 21.8 million shares to Victoria.
The statement said that Takara intends to complete a US$1.2 million private placing, to close concurrently with the share-based acquisition. The pricing and number of placing shares has not been determined yet. The acquisition shares of 21.8 million represent approximately 56% of Takara’s issued and outstanding share capital, which totals 38.9 million shares on a post-acquisition and post-consolidated basis. A further 4 million shares may be payable, subject to development milestones, the release stated.
Through the transaction, which was initially announced in November last year, Takara will acquire all of the issued and outstanding shares of SGI, which holds title to the Tassawini gold project and the BRL Venture. The wholly owned Tassawini property is an advanced-stage gold exploration project, which hosts 436,000 Indicated and 61,500 Inferred gold ounces, located in the Barima-Waini District (Region One).
Tassawini has a total area of 9650 hectares encompassing two adjoining prospecting licences, Tassawini PL and Anaturi PL, and four Medium Scale Mining Permits (MSMPs).
BRL is a joint venture between SGI and Newmont Mining Corp, covering a large strategic land position within the Arakaka Gold District in Northwest Guyana. According to the release, as at July 1 last year, SGI held 31.96% interest with Newmont holding the remaining 68.04%. According to SGI, the district has been popular with local placer miners for the past 100 years, but until recently it had not been explored systematically using modern techniques.
To date, SGI’s regional exploration efforts have covered an area of over 4,000 square kilometres, resulting in two key projects areas, the Monosse and the ‘A’ & ‘B’ projects, with the latter hosting over 25 individual gold exploration targets, the statement said. It also disclosed that under the terms of the deal, Victoria is entitled to nominate directors to Takara’s board.
Accordingly, Victoria can appoint directors representing one-third of the board whilst it owns more than 20% of the company and up to one-fifth should it hold between 5-20% of Takara’s shares.
Victoria will be entitled to the additional four million Takara shares once a positive preliminary economic assessment is completed or if Takara enters into project financing arrangements for any of the mineral rights held by StrataGold upon closing.
Victoria is also entitled to pre-emptive rights, enabling it or any of its affiliates to participate in future equity financings in Takara, in order to maintain a minimum non-diluted 19% shareholding. The pre-emption rights expire on September 30 next year or 12 months thereafter, if Takara disposes of its interest in SGI. The release said that certain escrow conditions will be placed on Victoria’s shareholding, and additionally upon completion, Victoria will be restricted in its trading of Takara shares.
Subsequently the company will be limited to trading no more than 25% of Takara’s average 30 day trading volume on the TSX Venture Exchange.
