Colibri signs LoI to buy Canadian Gold Resources

19 December 2016 (Last Updated December 19th, 2016 18:30)

Colibri Resource Corporation has signed a letter of intent (LoI) to acquire all issued and outstanding shares of Canadian Gold Resources (CGR) from Ontop Capital.

Colibri Resource Corporation has signed a letter of intent (LoI) to acquire all issued and outstanding shares of Canadian Gold Resources (CGR) from Ontop Capital.

Under the agreement, Colibri will issue approximately 26.6 million common shares carrying a value of $4m to CGR as consideration. The issued shares will serve as full and complete payment.

The transaction is subject to customary closing conditions including Policy 5.3 of the TSX Venture Exchange and subject to exchange approval.

Both parties will agree on the final structure for proceeding with the transaction following completion of due diligence and a review of tax, accounting, corporate and securities law issues.

"Both parties will agree on the final structure for proceeding with the transaction following completion of due diligence and a review of tax, accounting, corporate and securities law issues."

CGR holds complete interest in a private Mexican company, Minera Bestep, which holds a 100% interest in the 105ha Pilar Gold Project and 110ha Sun Project.

Both these properties are located near the Suaqui Grande, Sonora Mexico.

CGR acquired Pilar Gold Project at $1m and completed significant development work including mapping, trenching, sampling and accomplished nearly 15,000m of drilling. The property also has a NI43-101 Report.

CGR carried out a Reverse Circulation Drilling Programme that gave the results of 13.95g per tonne (gpt) Au at JESP-12 hole while hole 12-4 had 5.89gpt, and hole 13-15 had 13.92gpt over 1.5m.

At the other property Sun Project, only preliminary exploration work has been conducted.

Canadian mineral exploration company Colibri concentrates on acquiring and exploring properties in Mexico.