Austral to sell Chile copper projects to Colossus
Junior gold miner Austral Gold has signed a letter of intent (LoI) with TSX-V-listed Colossus Resources to divest of the noncore Calvario and Mirador copper projects in northern Chile.
The Calvario and Mirador projects are early-stage copper exploration projects located approximately 80 km northeast of the coastal city of La Serena in the Coquimbo region of central-northern Chile in South America, approximately 700 km from the Austral Group’s Guanaco-Amancaya mine complex.
Under the terms of the proposed agreement, Austral will receive an up-front cash payment of $100 000 for an exclusivity option.
On taking up the option, Colossus will commit to spend $2.5-million on exploration over the project areas over a two-year period, with at least $1.5-million to be spent in the first 18 months. On signing a definitive agreement, Austral will also acquire a 19.9% shareholding in Colossus on a non-diluted basis, along with one-million options, each of which will be exercisable at a price of C$0.50 with a three-year term.
If a prefeasibility study is completed on the project area, Colossus will issue Austral a further two-million common shares. The company will also be granted an anti-dilution right to maintain its 19.9% shareholding in Colossus through a $3.8-million capital raise.
As long as Austral maintains at least a 10% interest in Colossus, the company will appoint a board representative, and appoint two representatives to the Colossus Technical Committee.
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