Kingsgate finds Canadian buyer for Chilean project
PERTH (miningweekly.com) – Gold miner Kingsgate Consolidated has inked a non-binding letter of intent with TSX-V listed TDG Gold Corporation to divest of its Nueva Esperanza gold/silver exploration project, in Chile, for A$69-million.
The transaction will consist of a C$25-million cash component that will be payable to Kingsgate on the completion of the transaction.
The Australian company will also be issued 14% of TDG’s outstanding common shares calculated on a post-closing basis, with a further C$6.25-million in cash becoming payable within three months of the completion of a definitive feasibility study, and a further C$10-million in cash or 10-million TDG shares at a decision to mine.
Kingsgate told shareholders on Wednesday that the completion of a transaction for the Nueva Esperanza project would ensure the financial security of Kingsgate going forward, while still giving the company exposure to gold and silver markets through its shareholding in TDG.
The company noted that the flexibility would provide Kingsgate with optionality around the ongoing negotiations with the Thai government around its Chatree gold operation, including using the funds to possibly restart operations if a negotiated settlement could be achieved and all licences and permits were granted.
The potential transaction with TDG remains subject to a number of conditions, including the parties entering into a legally binding agreement, board approvals, due diligence, and TDG completing financing of at least C$35-million.
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