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Feb. 11, 2022, 8:17 a.m. EST

Austral Gold Signs Binding Offer Letter from Mexplort

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Sydney, Australia, Feb 11, 2022 (Newsfile Corp via COMTEX) -- Sydney, Australia--(Newsfile Corp. - February 11, 2022) - Austral Gold Limited (asx:AGD) /zigman2/quotes/205808903/delayed CA:AGLD 0.00% (" Austral " or the " Company ") is pleased to announce that Austral Gold Argentina SA ("AGASA"), a subsidiary of Austral, has accepted a binding offer letter to enter into a Joint Venture contract ("Agreement") (with Mexplort Perforaciones Mineras S.A. (" Mexplort "), a subsidiary of Corporación America International ("Corporación América"). Pursuant to the terms of the Agreement, the parties are to enter into a 50:50 Joint Venture ("JV") to identify and develop new precious metal projects located in the Indio belt in the Province of San Juan, Argentina and Mexplort is to grant AGASA an earn-in option whereby it may acquire a 50% interest in the Jaguelito project held by Mexplort through a concession granted by the Instituto Provincial de Exploraciones y Explotaciones Mineras de la Provincia de San Juan (IPEEM) in October 2011.

Austral Gold's Chief Executive Officer Stabro Kasaneva said: "We are investing in the Jaguelito project as we believe the project has the potential to discover a high sulphidation deposit of the Alturas - Del Carmen or even Veladero type in Argentina. The Jaguelito project appears to have the same affected volcanic units that host a large zone of alteration having the same age based on evidence of mineralization of silver and gold intercepted in previous drilling campaigns. The deal also represents an opportunity for Company's sponsored by two of Argentina's most prominent businessmen (Eduardo Eurnekian and Eduardo Elsztain) to create a new mining vehicle in the country."

Highlights:

a) Jaguelito Earn-in Option ("Option")

Mexplort is to grant AGASA an Option to acquire a 50% interest in the Jaguelito project (" Jaguelito ") for the following consideration:

  • US$2 million in exploration expenditures on Jaguelito within two years from the approval of the Option by IPEEM (the " First Stage "), including drilling a minimum of 5,000 meters.

  • US$2 million in exploration expenditures on Jaguelito within two years after completing the First Stage (the " Second Stage "), and

  • US$3 million payment to Mexplort if the Board of the JV Company approves the construction of the project based on a bankable feasibility study ("BFS").

After completion of the First Stage, AGASA will have 30 days to notify Mexplort of its intention to pursue the Second Stage. This will enable AGASA to maintain the exclusive right to explore Jaguelito and AGASA will be obligated to expend an additional US$2 million. If the Second Stage is completed and the Option is exercised, Mexplort shall assign and transfer 100% of the Mining Rights on Jaguelito to the JV Company and AGASA must transfer all mining information obtained on Jaguelito to the JV Company.

If AGASA does not complete the First Stage, it will owe Mexplort any amount due under the US$2 million of exploration expenses committed for the First Stage, which must include drilling of at least 5,000 meters.

If AGASA notifies Mexplort of its intention to pursue the Second Stage but does not complete it, AGASA will owe Mexplort any pending balance from the US$2 million committed for the Second Stage.

During the term of the exploration period, comprised by the First Stage and the Second Stage, an Exploration Committee will be created with two representatives from each company and such committee will be chaired by one of Austral's appointees. The expenditures are subject to a budget prepared by Austral and approved by the exploration committee.

Primary exploration targets on Jaguelito are gold, silver and other precious metals.

b) JV Company:

Both parties agree to create a new Company (the "JV") that will be owned equally within 60 days from signing the offer letter.

The JV will have a Board comprised of six (6) members of which each partner will nominate three (3) members.

The JV will also have initially two further Governance bodies:

  • an Exploration Committee comprised by four (4) members.

  • an Audit Committee comprised by three (3) members.

The Chairman position for each Governance body will rotate within certain period to each partner as per a Shareholder Agreement to be subscribed by the parties. During the first year, the Chairman of the Board will be a representative from Austral and the Chair of the Audit Committee will be a representative from Mexplort.

The Exploration Committee will be led by Austral representatives during the first 4-years of the exploration phases on the Jaguelito project.

As part of the Agreement, each company provided customary representations and warranties.

/zigman2/quotes/205808903/delayed
CA : Canada: TSX Venture
$ 0.05
0.00 0.00%
Volume: 100,000
Aug. 4, 2022 9:45a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$24.66 million
Rev. per Employee
N/A
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