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Wesdome to Monetize Moss Lake via Vend-In Transaction With Goldshore Resources

Jan 26, 2021

“Wesdome remains focused on advancing our vision of building Canada’s next mid-tier gold producer.," Mr. Duncan Middlemiss, President and CEO, commented. "The opportunity to advance Moss Lake and bolster our already strong balance sheet, all while retaining meaningful exposure to the project through a strategic equity position as the largest shareholder of Goldshore allows the Company to remain fully focused on our underground high-grade gold mining expertise. This year is pivotal as Wesdome expects to deliver the Kiena Complex into commercial production, expand operations at Eagle as well as move forward on aggressive surface and underground exploration programs at both sites.”

Wesdome Gold Mines Ltd. has entered into a definitive purchase agreement with Goldshore Resources Inc. to monetize its Moss Lake Project in Ontario. Pursuant to the Agreement, Goldshore will acquire all of Wesdome’s property, assets and rights related to Moss Lake. Following the closing of the Transaction, Goldshore will hold a 100% interest in Moss Lake.

Under the terms of the Agreement, Wesdome will receive minimum initial aggregate consideration of $57M, comprised of the following:

  • C$12.5 million in cash upon Closing;
  • Shares of Goldshore in an amount equal to the greater of a) $19.5 million and b) 30% of the issued and outstanding common shares at Closing;
  • C$20 million in shares of Goldshore in the form of milestone payments consisting of: 
    • C$5 million within 12 months of Closing;
    • C$7.5 million upon the earlier of (i) Goldshore completing an updated PEA or pre-feasibility study; and (ii) 30 months from Closing;
    • C$7.5 million upon the earlier of (i) Goldshore completing a feasibility study, (ii) the date on which Goldshore makes a development decision on Moss Lake; and (iii) 48 months from Closing;
  • The grant to Wesdome of a 1.00% NSR royalty on all metal production from Moss Lake. Goldshore shall have the right to repurchase the NSR royalty for (i) C$5 million within 30 months of Closing; or (ii) C$7.5 million between 30 – 48 months from Closing. The royalty buyback rights shall expire if not exercised within 48 months of Closing
  • Wesdome representation on Goldshore’s Board of Directors with two appointees, Heather Laxton, Chief Governance Officer and Corporate Secretary, and Michael Michaud, Vice President, Exploration

The Transaction is subject to customary closing conditions for a transaction of this nature, including completion of the proposed reverse take-over business combination between Goldshore and Sierra Madre Developments Inc. (resulting in the listing of Goldshore on the TSX Venture Exchange) and receipt of required regulatory approvals. For more information regarding the transaction please see the public filings of Sierra Madre Developments Inc. on Sedar and the Goldshore Resources Inc. press release dated January 26, 2021.

Closing of the Transaction is expected to occur in early Q2 2021.

Tags: Northern Ontario / Deals & Financial / Gold / All Articles