Austral extends South American reach
PERTH (miningweekly.com) – ASX-listed Austral Gold would become a cornerstone investor in TSX-listed Goldrock Mines, which owns the Lindero gold project, in Argentina.
Austral would subscribe for some 11.56-million shares in Goldrock, at a price of C$0.80 each, for a total cash consideration of C$9.3-million. As part of the subscription agreement, Austral would also be issued with one new warrant for every new share, with the warrants having a strike price of C$0.80 each for a period of 60 months.
On completion of the subscription agreement, Austral would hold a 15% interest in Goldrock, and would have the right to appoint one nonexecutive director to the TSX-listed company’s board.
In addition, the subscription agreement granted pre-emptive or anti-dilution rights to Austral, entitling the company to participate in any future sales or equity offering to maintain its shareholding.
With this investment, Austral would become Goldrock’s largest shareholder.
Executive chairperson Eduardo Elsztain said that the transaction with Goldrock marked the next step in Austral’s strategy of creating a leading South America-focused precious metals resource company.
“Austral has now committed almost $15-million into precious metals investment in South America in recent months. Our Guanaco gold mine, in Chile, continues to perform well and the free cash it generates gives us the financial flexibility to strengthen our portfolio of assets through equity investments and directly into new projects.”
Goldrock owns the Lindero gold project, which has a proven and probable reserve of 65.5-million tonnes, grading 0.72 g/t gold for 1.52-million ounces.
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