JOHANNESBURG (miningweekly.com) – Precious metals producer Pan African Resources and Auroch Minerals have agreed to amend the terms of the acquisition by Auroch of Pan African’s Manica gold exploration project, in Mozambique.
Under the terms of the original agreement, announced in August 2012, Pan African was entitled to receive 25-million shares in Auroch and a A$2-million cash payment within 18 months of the completion of the deal.
Thereafter, the JSE- and Aim-listed company would have been entitled to further share and cash payments subject to Auroch achieving certain milestones at the project.
The South African gold mining company had already received the 25-million shares in Auroch, with the shares being subject to an embargo arrangement with the ASX, in terms of which the shares may not be sold or transferred until January 2015.
Pan African said in a statement to shareholders on Tuesday that it now wished to “expedite the realisation value” pursuant to the transaction and had, therefore, agreed to amend the terms of the original agreement.
Auroch would now be required to pay Pan African A$150 000 of the overall A$2-million cash consideration by November 30.
Thereafter, it would be expected to settle the remaining portion of the cash consideration by March 1, 2014.
Auroch could extend the final payment date by a further two months by paying Pan African A$50 000 per month of extension. This would form part of the overall cash payment.
This would settle the transaction in full, with no further cash or share payments required.
If Auroch settled the cash amount in accordance with the terms of the new deal, Pan African would allow it to re-acquire or cancel the 25-million shares issued to Pan African at no additional cost or consideration.
However, if it failed to settle the cash consideration in terms of the new agreement, the amended agreement would expire and the terms of the original agreement would be restored.