Austral Gold Enters North American Market with Investment in the Rawhide Gold and Silver Mine
Austral Gold Enters North American Market with
Investment in the Rawhide Gold and Silver Mine
Sydney, Australia--(Newsfile Corp. - December 18, 2019) -
Austral Gold Limited (ASX: AGD) (TSXV: AGLD) (
"Austral"
or the
"Company"
) is pleased to announce that its newly-formed Nevada subsidiary, Austral Gold North America Corp. (
"AGNA"
),
has acquired an equity interest in Rawhide Acquisition Holding LLC (
"RWH"
), a privately-held Delaware limited liability
company that owns Rawhide Mining LLC which in turn owns the Rawhide Mine located ~50 miles outside of Fallon, Nevada,
United States.
About Rawhide
Rawhide Acquisition Holding LLC is privately held and acquired the Rawhide mine ("Rawhide") through Rawhide Mining LLC in
2010. Rawhide is a fully permitted operation that produces gold and silver through an open pit heap leaching operation. In 2019,
Rawhide received a mine expansion permit associated with the Regent open pit.
Rawhide is a historical mining operation that started in the early 1900s located in the Walker Lane structural zone, one of the
most prolific gold mining districts in the world, and is located 50 miles from Fallon, Nevada, USA. It is surrounded by multiple 1.0
million+ gold oz deposits.
Rawhide was formerly operated as a subsidiary of Kennecott Corp. prior to Coral Reef Capital partnering with the Rawhide
mine management team to acquire the property from Rio Tinto Plc in 2010. Coral Reef Capital is the controlling shareholder.
Transaction Terms
Under the transaction agreement, AGNA made an initial purchase of approximately 22.48% (21.28% on a fully diluted basis)
directly from Rawhide for a purchase price of US $3,957,406, of which US $2,000,000 was paid in cash at closing.
The balance
of US $1,957,406 is to be paid pursuant to the terms of a promissory note maturing January 31, 2020.
The initial purchase is to
be funded primarily from Austral's existing cash reserves.
In addition, AGNA has entered into three option agreements with three existing Unit owners pursuant to which it has the option to
purchase up to an additional 3.795 percent of the issued and outstanding Rawhide Units for an aggregate purchase price of US
$750,813 (collectively, the
"Options"
) until they expire at various dates during the first six months of 2020.
If AGNA exercises all
of these Options, it will own approximately 26.46% (25.04% on a fully diluted basis). Funding of the Option payments is expected
to be paid either with new debt or from cash generated from operations.
AGNA is entitled to nominate one manager to the six-member Rawhide management committee.
Upon exercise of the Options,
AGNA will be entitled to a second seat on a seven-member Rawhide management committee.
AGNA is also entitled to
nominate one member of each of Rawhide's Operating and Exploration Committees.
Austral Gold's Chief Executive Officer Stabro Kasaneva said:
"I believe Rawhide is a project with considerable unlocked
value and this investment presents an excellent entry point into the North American mining sector backed by experienced and
proven operators who have worked at major mining companies including Rio Tinto and Argonaut Gold Inc.
Nevada, is one of the world's preeminent mining locations and there is room for future growth. We are confident that we can
leverage our experience from our mines to benefit the operations at Rawhide, which has an open pit mining operation and heap
leaching process. The mining district and land package controlled by Rawhide is large and we believe there is potential to
considerably increase the mineral inventory."
Rawhide's Director Marceau Schlumberger said:
"We are pleased to have Austral Gold as an investor and partner in the
Rawhide Mine.
We believe the experience of the Austral team combined with Rawhide management provides the necessary
skill set to complete the production ramp up and fully optimize the operational and exploration potential of Rawhide. We
welcome Austral and look forward to the future success of this operation."
About Austral Gold
Austral Gold Limited is a growing precious metals mining, development and exploration company building a portfolio of
quality assets in Chile and Argentina. The Company's flagship Guanaco/Amancaya project in Chile is a gold and silver
producing mine with further exploration upside. The company also holds the Casposo Mine (San Juan, Argentina) and an
attractive portfolio of exploration projects including the Pingüino project in Santa Cruz, Argentina (100% interest) and the San
Guillermo and Reprado projects near Amancaya (100% interest). With an experienced local technical team and highly
regarded major shareholder, Austral's goal is to continue to strengthen its asset base through acquisition and discovery.
Austral Gold Limited is listed on the TSX Venture Exchange (TSXV: AGLD), and the Australian Securities Exchange. (ASX:
AGD). For more information, please consult the company's website
www.australgold.com
.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
On behalf of Austral Gold Limited:
"Stabro Kasaneva"
CEO
For Further Information please contact:
José Bordogna
Chief Financial Officer
Austral Gold Limited
54 11 4323 7558
David Hwang
Company Secretary
Austral Gold Limited
61 2 9698 5414
Forward Looking Statements
Statements in this news release that are not historical facts are forward-looking statements.
Forward-looking statements are
statements that are not historical, and consist primarily of projections - statements regarding future plans, expectations and
developments.
Words such as "expects", "intends", "plans", "may", "could", "potential", "should", "anticipates", "likely",
"believes" and words of similar import tend to identify forward-looking statements.
Forward-looking statements in this news
release include the balance of US $1,957,406 is to be paid pursuant to the terms of a promissory note maturing January 31,
2020, the initial purchase is to be funded primarily from Austral's existing cash reserves, funding of the Option payments is
expected to be paid either with new debt or from cash generated from operations, Rawhide is a project with considerable
unlocked value, there is room for future growth, there is potential to considerably increase the mineral inventory, the experience
of the Austral team combined with Rawhide management provides the necessary skill set to complete the production ramp up
and fully optimize the operational and exploration potential of Rawhide and we look forward to the future success of this
operation. All of these forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other
factors that could cause actual events or results to differ from those expressed or implied, including, without limitation, business
integration risks; uncertainty of production, development plans and cost estimates, commodity price fluctuations; political or
economic instability and regulatory changes; currency fluctuations, the state of the capital markets, uncertainty in the
measurement of mineral reserves and resource estimates, Austral's ability to attract and retain qualified personnel and
management, potential labour unrest, reclamation and closure requirements for mineral properties; unpredictable risks and
hazards related to the development and operation of a mine or mineral property that are beyond the Company's control, the
availability of capital to fund all of the Company's projects and other risks and uncertainties identified under the heading "Risk
Factors" in the Company's continuous disclosure documents filed on the ASX and on SEDAR.
You are cautioned that the
foregoing list is not exhaustive of all factors and assumptions which may have been used. Austral cannot assure you that actual
events, performance or results will be consistent with these forward-looking statements, and management's assumptions may
prove to be incorrect. Austral's forward-looking statements reflect current expectations regarding future events and operating
performance and speak only as of the date hereof and Austral does not assume any obligation to update forward-looking
statements if circumstances or management's beliefs, expectations or opinions should change other than as required by
applicable law. For the reasons set forth above, you should not place undue reliance on forward-looking statements.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/50893