Golden Reign Resources has signed a letter of intent (LoI) to combine its San Albino-Murra property in Nueva Segovia, Nicaragua, with Marlin’s La Trinidad mine in Sinaloa, Mexico.
The companies will close the acquisition following the completion of the Marlin reorganisation, which comprises sale of its Commonwealth silver and gold property in Cochise County, Arizona, US, in order to reduce debts and liabilities.
Once the transaction is closed, the current shareholders and option holders of Marlin will own 45% of the shares of Golden Reign, while the remaining 55% will be held by existing non-Marlin Golden Reign shareholders.
Golden Reign Resources CEO and director Kevin Bullock said: “The combined entity creates a focused precious metals exploration and development company with an unencumbered high-margin asset in Nicaragua, immediate production and cash flow from La Trinidad, cash flow growth, no debt, geographic diversification and significant exploration potential.
“We are excited to shortly be able to begin construction of a 500tpd mine at San Albino, and grow production and cash flow to fund exploration of the highly prospective 138km² high-grade gold camp in Nicaragua.”
Following the completion of the business combination, the combined entity will most likely be called ‘Mako Mining Corp’.
Marlin will provide a C$4m bridge loan to Golden Reign over a one-year term.