A2Gold has signed an agreement to sell its Bolo Gold project in Nye County, Nevada, US to Super Gold Mining for shares valued at C$1.5m ($1.07m) and potential future payments of up to C$2.8m ($2m).
The sale covers a 100% interest in the project, which consists of 187 unpatented lode mining claims and the Uncle Sam claim.
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Under the definitive Mining Property Purchase and Sale Agreement, Super Gold will issue A2Gold 3,750,000 common shares at a deemed value of C$0.40 each when the transaction closes.
Super Gold has also agreed to replace approximately $198,500 in reclamation bonding, allowing release of A2Gold’s existing reclamation funds, and to reimburse claim maintenance fees paid for the current year.
The additional payments depend on future work at Bolo. A2Gold could receive cumulative mineral resource milestone payments of up to C$2.4m, based on gold-equivalent ounces identified in future estimates.
A further C$400,000 would be payable if a qualifying Preliminary Economic Assessment incorporates at least 200,000 gold-equivalent ounces and meets thresholds set out in the agreement.
The resource payments start at C$500,000 for 200,000 to 399,999 gold-equivalent ounces. They rise through specified thresholds to C$2.4m for a resource of at least 1,000,000 ounces.
A2Gold CEO Peter Gianulis said: “The transaction positions Bolo for advancement by a group committed to funding the Project, while allowing A2Gold to focus on Eastside and Taylor, where we see the greatest opportunity to create shareholder value.”
Super Gold must engage an independent Qualified Person and complete work reasonably required to support an initial NI 43-101 mineral resource estimate within two years of closing.
Super Gold has agreed to use commercially reasonable efforts to complete a Going Public Transaction within 12 months of closing, and no later than 18 months, subject to extension provisions.
If it has not done so within 12 months, A2Gold will be entitled to C$200,000 in cash. After 18 months, the company may be able to require the return of Bolo, subject to the agreement’s terms and cure provisions.
Closing of the deal is expected within the next few weeks, subject to conditions including replacement bonding, approval of the Plan of Operations transfer, delivery of a Cordex estoppel certificate and completion of title documentation.
