Argonaut Gold
Argonaut Gold Enters into Agreement to Sell Ana Paula Project for US$30 Million plus a C$10 Million Contingent Payment; Upside to Ana Paula Project Retained Through 9.9% Equity in Acquiring Company and 1% Net Smelter Returns Royalty
TORONTO, Sept. 11, 2020 /CNW/ - Argonaut Gold Inc. (TSX: AR) (the "Company", "Argonaut Gold" or "Argonaut") is pleased to announce it has entered into a definitive agreement for the sale of its Ana Paula gold development project located in the Guerrero Gold belt of Mexico (the "Ana Paula Project"). Total consideration to Argonaut includes:
- US$30 million on closing;
- C$10 million upon the announcement of commencement of construction;
- A 1% net smelter returns royalty; and
- 9.9% of the outstanding common shares of the acquiring company, which will be formed by a business combination of 1252201 BC Ltd ("AP Mining") and Pinehurst Capital II Inc. ("Pinehurst"), creating a new publicly traded gold development company (the "Resulting Issuer").
Pete Dougherty, President and CEO stated: "When you consider the value of Alio Gold when we announced the at-market merger less than six months ago, you can begin to recognize the tremendous value-creation opportunity Argonaut's board and management saw at the time of the merger. The proceeds of this transaction support Argonaut's focus on the development of our Magino gold project in Ontario, Canada by providing upfront capital while still providing Argonaut shareholders with upside participation in the Ana Paula Project through Argonaut's equity ownership in the Resulting Issuer, a contingent payment upon a construction announcement and a royalty. Bruce Bragagnolo, the CEO of the Resulting Issuer, was the former CEO of Timmins Gold Corp., a former owner of the Ana Paula Project."
Sale Agreement
Argonaut has entered into a definitive agreement with AP Mining dated September 10, 2020 (the "Argonaut Agreement") for the sale of all of the issued and outstanding shares of Aurea Mining Inc. and its wholly-owned subsidiary Minera Aurea S.A. de C.V. (the Ana Paula Project holder).
AP Mining has in turn 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 (the "Qualifying Transaction") whereby Pinehurst will be the parent company and 100% of the issued and outstanding securities of AP Mining will be owned by the Resulting Issuer, conditional on the completion by AP Mining of the acquisition of the Ana Paula Project pursuant to the terms of the Argonaut Agreement.
Under the terms of the Argonaut Agreement, AP Mining will acquire all of 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 comprised of, in part, US$30 million in cash on closing, a promissory note in the amount of C$10 million payable on the date on which the Resulting Issuer announces the commencement of construction at the Ana Paula Project, a 1% net smelter returns royalty and such number of common shares of the Resulting Issuer as is equal to 9.9% of the outstanding common shares of the Resulting Issuer immediately following the completion of the Qualifying Transaction. Closing of the transactions set out in the Argonaut Agreement are subject to a number of conditions including regulatory approval, including TSX Venture approval, approval of the Qualifying Transaction and successful completion of the capital raising in connection with the Qualifying Transaction.
Upon completion of the Qualifying Transaction, Bruce Bragagnolo will serve as the Chief Executive Officer and a director of the Resulting Issuer, with the remaining management team and directors to be determined prior to the completion of the Qualifying Transaction.
Mr. Bragagnolo was the co-founder and Chief Executive Officer of Timmins Gold Corp. Mr. Bragagnolo took Timmins Gold Corp. from its IPO to commercial production and its listing on the NYSE-MKT. While he was CEO, Timmins Gold Corp. built the San Francisco Mine in Mexico. Mr. Bragagnolo led the purchase of the Ana Paula Project by Timmins Gold Corp. in 2015.
About Argonaut Gold
Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production. Its primary assets are the El Castillo mine and San Agustin mine, which together form the El Castillo Complex in Durango, Mexico, the La Colorada mine in Sonora, Mexico and the Florida Canyon mine in Nevada, USA. Advanced exploration projects include the Magino project in Ontario, Canada, the Cerro del Gallo project in Guanajuato, Mexico and the Ana Paula project in Guerrero, Mexico. The Company holds several other exploration stage projects, all of which are located in North America.
For more information, contact:
Argonaut Gold Inc.
Dan Symons
Vice President, Investor Relations
Phone: 416-915-3107
Email: dan.symons@argonautgold.com
1252201 BC Ltd.
Bruce Bragagnolo, CEO
Phone: 604-417-9517
Email: brucebrag@gmail.com
Source: https://www.argonautgold.com/English/news-and-events/news-releases/news-releases-details/2020/Argonaut-Gold-Enters-into-Agreement-to-Sell-Ana-Paula-Project-for-US30-Million-plus-a-C10-Million-Contingent-Payment-Upside-to-Ana-Paula-Project-Retained-Through-9.9-Equity-in-Acquiring-Company-and-1-Net-Smelter-Returns-Royalty/default.aspx
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EXPLORATION AND DATA PROCESSING GEOLOGIST - ONTARIO, CANADA
Reporting to the Regional Exploration Manager, the Geologist will participate in the discovery of additional resources within the company’s tenure by designing and undertaking field exploration and drilling programs and critically evaluate the outcomes from completed exploration programs.