SEATTLE (Scrap Monster): Vancouver, B.C.-based Eldorado Gold Corporation announced that it has entered into a definitive agreement with G Mining Ventures Corp. to divest its construction ready Tocantinzinho Gold Project in northern Brazil. The open pit gold deposit is said to contain 1.8 million ounces of gold reserves.
Under the terms of the agreement, Eldorado will receive minimum upfront consideration of $50 million, comprising of at least $20 million in cash and 19.9% of G Mining shares, upon closing of the transaction. Additionally, a sum of $60 million in cash will be paid, upon commercial production from the mine, to be paid on first anniversary of commercial production, the company press release said.
The agreement also provides an option to defer 50% of the deferred consideration at a cost of $5 million. In this case, $30 million and $35 million must be paid upon the first and second anniversary of the commercial production respectively.
George Burns, President and CEO, Eldorado commented that the transaction provides with immediate value for Tocantinzinho, while retaining meaningful exposure to future value creation by way of its equity stake in G Mining. Tocantinzinho will be a cornerstone asset for the buyer, he added.
The transaction is subject to customary closing conditions, including necessary regulatory approvals. It is expected to close during the final quarter of the current year.
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