Aim-listed Richland Resources has entered into a binding share purchase agreement (SPA) with the existing shareholders of Global Asset Resources (GAR) for the conditional acquisition of GAR.

GAR, through its wholly-owned subsidiary, Global Asset Resources Holdings, holds a 51% interest in and operatorship of four gold exploration projects − Jones-Keystone Loflin, Carolina Belle, Jennings Pioneer and Argo − in North and South Carolina in the US.

The proposed transaction constitutes a reverse takeover transaction pursuant to Rule 14 of the Aim Rules for Companies. It also represents a transformational move for the company away from being an Aim Rule 15 cash shell to becoming an operating company with a clear focus on exploration for gold and other precious metals in North and South Carolina.

In accordance with Rule 14 of the Aim Rules and the SPA, completion of the proposed transaction is subject, besides others, to approval by Richland’s shareholders at a general meeting to be convened in due course, and successful completion of the proposed placing.

As part of the proposed transaction, Richland intends to change its name, subject to shareholder approval at the general meeting, to Lexington Gold.

Richland also intends to undertake, subject to shareholder approval, a share capital consolidation to reduce the total number of common shares in issue on completion and re-admission of the enlarged group to trading on Aim, and certain other changes to the company's by-laws to bring it into greater alignment with more UK market standard corporate governance practices.

The consideration for the proposed transaction comprises an aggregate payment on completion of the proposed transaction to the sellers and GAR's joint venture partner, Uwharrie Resources (URI), of $42 500 in cash, and $737 500 in new common shares in the capital of the company.

In addition, Richland is required to make two non-refundable cash payments to GAR of $29 340 on July 31, and $22 818 on September 30, regardless of whether or not completion has occurred by these dates, with such payments being used to cover certain project costs pending completion.

Further, Richland may also be required to make two additional future conditional deferred consideration payments to the sellers and URI, in cash or new common shares at Richland's sole discretion, of, in aggregate, A$1.5-million and A$3-million, linked to the achievement of certain performance milestones or the occurrence of certain vesting events during the five year period following completion.

In conjunction with the proposed transaction, Richland is making certain changes to the composition of its board. CEO Anthony Brooke and nonexecutive director Nicholas Sibley are stepping down from the board with effect from July 27, while Bernard Olivier and Melissa Sturgess are joining the board as CEO and nonexecutive director respectively, with immediate effect.