Elcora Advanced Materials has entered into an agreement for the proposed acquisition of the Eldorado gold mine in South Africa’s Barberton Greenstone Belt, marking its entry into gold asset ownership.
The transaction involves the purchase of 100% of the Eldorado property, including the associated surface tailings stockpile, as outlined in a binding range of terms (BROT) with Elmaic Trading CC (the Vendor).
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It will proceed via a share purchase transaction, with Elcora acquiring all shares of the Vendor following its conversion to a private company.
The purchase price includes $2m (C$2.76m) in cash and 20 million common shares, pending approval from the TSX Venture (TSXV) Exchange and regulatory bodies in South Africa.
Completion of the transaction depends on several conditions such as satisfactory due diligence, execution of a definitive agreement, and renewal or confirmation of relevant prospecting rights.
The agreement outlines a phased transfer of ownership, initially involving 50% of membership interests, conditioned upon final regulatory acceptance. The remaining 50% will follow, based on further obligations specified in the definitive agreement.
Elcora Advanced Materials director, president and CEO Troy Grant said: “Phase 0 is designed to generate cash starting within an anticipated time frame following acquisition, partially funding the mine development life cycle and reducing the need for dilutive equity raises that are typical of early stage mining acquisitions.
“The anticipated timeline and cash flow generation from phase 0 are subject to tailings characterisation, processing recoveries, operating costs and gold prices, none of which have been established at this stage.
“We are moving quickly and deliberately to close this transaction and commence phase 0 operations.”
Elcora has also committed to issuing shares in two phases. The first tranche of 9.5 million shares will be released upon satisfying initial conditions, with the second tranche contingent on a resource validation milestone.
This includes confirming an inferred mineral resource of one million ounces of gold and obtaining necessary permits. Any shortfall in resource validation may lead to adjustments in share issuance, as per the contract.
Elcora aims to complete the preliminary assessment within six months post-closing, or within 18 months at the latest. Failure to meet this timeline, attributed to Elcora’s oversight, could lead to immediate issuance of the second tranche of shares to the Vendor.
Additionally, Elcora intends to allocate a minimum of $1.3m for capital and operational expenses to progress the project, independent of the purchase price.
The transaction is targeted for completion by 15 July 2026, subject to extensions aligned with ongoing TSXV reviews. The agreement allows parties to terminate the BROT if prerequisites are unmet by the specified deadlines.
