JOHANNESBURG (miningweekly.com) – Vancouver-based gold exploration company Evolving Gold has entered into a binding letter of intent (LOI) to sell its Rattlesnake Hills project, in Natrona county, Wyoming, in the US, to GFG Resources.
Evolving Gold advised on Tuesday that under the LOI, the acquisition of Rattlesnake Hills, which consisted of claims covering about 14 000 acres, was subject to GFG paying $1.6-million.
This was to be paid in three parts – $150 000 on signing of the LOI as a nonrefundable deposit, $850 000 within three business days of closing, which, subject to the satisfactory completion of due diligence, was expected on or before July 20, and $600 000 on the first anniversary of the closing, secured by a noninterest bearing promissory note.
At closing, GFG was also required to issue Evolving Gold two-million common shares of GFG. The shares would be subject to resale restrictions and hold periods under applicable securities laws in Canada and the US.
Evolving Gold would retain a 2% net smelter return royalty with 1% available for purchase for $1-million on production arising from the mining claims, save and except for 30 claims that were already subject to a pre-existing royalty.
The company may also be entitled to an additional 1.5-million common shares of GFG in the event that an independent National Instrument (NI) 43-101 resource report defined an aggregate mineral resource, including the inferred mineral resource category within the meaning of NI 43-101, for Rattlesnake Hills of at least one-million ounces of gold within four years of closing.
“It is anticipated that GFG will use reasonable commercial efforts to obtain a listing on a recognised stock exchange in Canada or the US prior to March 31, 2016,” noted Evolving Gold.