19th Apr 2016 08:39
LONDON (Alliance News) - Metminco Ltd on Tuesday said it is on track to complete the acquisition of Minera Seafield SAS, which owns the Quinchia gold project in Colombia, by the end of May.
The miner is buying Minera from RMB Resources Australia Ltd in a cash and shares deal. It will initially issue RMB with 50.0 million shares at 0.5 Australian cents each, and upon completion will issue a further 350.0 million shares at the same price as well as paying AUD500,000 for the costs of maintaining the operation whilst the deal is being finalised.
A year after the deal has been completed, Metminco will then pay RMB AUD1.0 million in cash and another AUD1.0 million two years after the deal has been completed. A third payment of AUD3.0 million will be after 36 months. A fourth payment of AUD2.0 million will then be made 48 months after the deal is completed.
Those last two payments will be made earlier if Metminco makes a decision to mine the operation.
Metminco will also pay a maximum of AUD7.0 million in royalty payments to RMB from operating cashflows.
Overall, Metminco is paying a total of AUD7.0 million in cash for the deal, in addition to the initial AUD500,000 and the AUD7.0 million in potential royalty payments, plus the 400.0 million shares.
On Tuesday, Metminco said it has shortlisted three international engineering firms to provide the company with detailed proposals to complete the feasibility study for the planned development of the Miraflores mine.
It hopes to achieve an annual gold production target in excess of 55,000 ounces.
Shares in Metminco were trading up 1% at 0.202 pence on Tuesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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