GoldSands signs JV agreement with Mineros

26 January 2012 (Last Updated January 26th, 2012 18:30)

GoldSands Development Company has signed a mineral rights option as well as a joint venture agreement with Colombia-based Mineros.

GoldSands Development Company has signed a mineral rights option as well as a joint venture agreement with Colombia-based Mineros.

Under the terms of the deal, Mineros will receive two exclusive options to purchase an 85% stake in GoldSands' ownership interest in 50 mineral rights concessions in north-east Peru. Mineros will explore and potentially develop the mineral rights.

GoldSands CEO Michael Stocker said that Mineros' vision and values are a perfect fit for GoldSands as the company takes an approach where finance go hand in hand with the observance of environmental and social values.

Mineros will conduct due diligence investigations from 30 April 2012 to proceed with the first option agreement. Mineros is entitled to collect samples and will also be responsible for all related costs, including any services performed by GoldSands.

Under the 24-month first option agreement, Mineros must determine to either terminate the agreement and its involvement with the GoldSands project or proceed to exercise the first option, which will begin after ten days the due diligence period have passed. Under the second option, both parties will enter into a joint venture (JV) through the formation of a special purpose entity in which Mineros would own an 85% interest and GoldSands would own the remaining 15% interest.

If Mineros exercises options one and two, it will be responsible for developing a feasible mining project and all necessary facilities for the extraction, crushing, processing and beneficiation of commercially valuable minerals.

Colombia-based Mineros is one of the world's largest producers of alluvial gold with an annual alluvial gold yield of approximately 85,000oz. Mineros has been seeking additional prospective gold projects in South America for the last few years and has allocated $79m for operational expansion, $25m of which was for new exploration activities.