Austral Gold Options Chilean Copper Projects to Colossus Resources
Austral Gold Options Chilean Copper Projects
to Colossus Resources
HIGHLIGHTS
Option to be granted to Colossus Resources Corp. ("Colossus") (TSXV: CLUS) to purchase
Austral's Chilean Calvario and Mirador copper projects, previously acquired through the takeover
of Revelo Resources Corp in 2021
[1]
.
Consideration comprised mainly of (i) a US$2.5 million work commitment over a two-year period,
(ii) 19.99% shareholding in Colossus (non-diluted basis), (iii) one million Colossus warrants at an
exercise price of C$0.50 and anti-dilution rights up to Colossus raising US$3.8 million.
Additional payment of two million Colossus common shares if Colossus prepares a pre-feasibility
study.
Colossus to complete an equity financing for proceeds of not less than US$1.5M within 90 days
after the date of the Agreement and any required regulatory approval.
Austral would become the largest shareholder of Colossus.
Vancouver, British Columbia--(Newsfile Corp. - November 16, 2023) -
Established gold producer
Austral Gold Limited
(ASX: AGD) (TSXV: AGLD) (OTCQB: AGLDF) ("
Austral
" or the
"
Company
") and Colossus Resources ("Colossus") (TSXV: CLUS) signed a definitive agreement
("Agreement") to grant Colossus an option to purchase Austral's Chilean Calvario and Mirador copper
projects (collectively, the "
Projects
"). The Agreement follows the initial media release on 5 April 2023,
which provided exclusivity to Colossus through a Letter of Intent ("LOI") and the payment of US$100,000.
The Projects are early-stage copper exploration projects located approximately 80 km northeast of the
coastal city of La Serena in the Coquimbo Region of central-northern Chile in South America,
approximately 700 km from the Austral Group's Guanaco-Amancaya mine complex.
Grant of the Option is subject to conditions, including, the necessary approval of the transaction by the
regulatory authorities, and certain undertakings from Colossus, including the requirement that Colossus
complete an equity financing in which it raises at least US$1.5M within 90 days after the date of the
Agreement.
Austral Gold's Chief Executive Officer
,
Stabro Kasaneva
said:
"Further to the letter of intent signed
earlier this year, Austral is pleased to execute a definitive agreement with Colossus. The agreement
offers potential upside for the Company, enabling Austral to focus on its core gold assets across
production and exploration, while still sharing in the potential success of the Calvario-Mirador copper
projects in Chile as the largest shareholder of Colossus."
Highlights Of Consideration:
WORK COMMITMENT: US$2.5 million in exploration expenditures on the Calvario and Mirador
projects (Projects) over a period of two years, of which at least US$1.5 million must be incurred in
the first 18 months, inclusive of the US$100,000 payment made to the Austral Group for exclusivity
through the LOI in April 2023.
SHARES: Issuance of Colossus shares equivalent to 19.99% shareholding in Colossus on a non-
diluted basis. If the Austral Group intends to exercise warrants that would provide it an interest
greater than 19.99%, Colossus shall use reasonable commercial efforts to obtain disinterested
shareholder approval agrees to seek shareholder approval for the constitution of Austral as a
'control person' of Colossus.
WARRANTS: One million warrants, each exercisable for one ordinary share of Colossus at an
exercise price of C$0.50 until the third anniversary of the date of the definitive agreement. The
warrants can only be exercised to the extent Austral Group will not exceed voting power in
Colossus of 19.99% unless and until Colossus obtains shareholder approval for the constitution of
the Austral Group as a control person, and Colossus will agree to seek such approval.
CONTINGENT PAYMENT: If a pre-feasibility study is prepared in respect of the Projects, Colossus
shall issue to Austral Group 2 million common shares of Colossus, provided that if as a result of
such issuance the percentage interest of the Austral Group would exceed 19.99% Colossus will
use reasonable commercial efforts to seek the approval for the constitution of the Austral Group as
a control person and until such date, the parties shall defer a portion of the share issuance such
that they maintain the Austral Group's percentage interest in Colossus at or below 19.99%.
ANTI-DILUTION RIGHTS AND PARTICIPATION RIGHTS: Colossus will grant to the Austral Group
an anti-dilution right so that Austral Group's interest in Colossus remains at 19.99% through the
raising of US$3.8 million, inclusive of the US$2.5 million exploration expenditures on the Projects
mentioned above, as well as pre-emptive rights to participate, pro rata, in future financings of
Colossus until the third anniversary of the closing date.
BOARD REPRESENTATION AND TECHNICAL COMMITTEE: Austral is to have the right to
appoint one person to the Colossus Board for as long as it holds at least ten percent (10%) of
Colossus's outstanding shares. Austral is also to have the right to appoint 2 out of 4 members of
Colossus's Technical Committee.
ROYALTIES: Austral is to retain its option to purchase half of the existing net smelter return
royalties over base and precious metals in respect of the Calvario and Mirador projects.
About Colossus Resources Corp.
Colossus Resources is a relatively young junior mineral exploration company focused on maximising
shareholder value through the acquisition, discovery and advancement of high-quality copper - gold
projects in the Americas.
Neither 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.
Release approved by the Chief Executive Officer of Austral Gold, Stabro Kasaneva.
For more information, please contact:
Jose Bordogna
Chief Financial Officer
Phone: +61 466 892 307
Gareth Quinn
Media and Investor Relations
Phone +61 417 711 108
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 option to be granted to Colossus, the related consideration, Austral would become the largest
shareholder of Colossus, the parties ability to obtain approval from the regulatory authorities and the
agreement offers potential upside for the Company and the share in the potential success of the
Calvario-Mirador copper projects in Chile.
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, uncertainty of exploration programs, development plans and cost
estimates, commodity price fluctuations; political or economic instability and regulatory changes;
currency fluctuations, the state of the capital markets especially in light of the effects of the novel
coronavirus, uncertainty in the measurement of mineral resources and reserves and other risks and
hazards related to the exploration of a mineral property, and the availability of capital.
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.
About Austral Gold
Austral Gold is a growing gold and silver mining producer building a portfolio of quality assets
in the Americas.
Austral continues to lay the foundation for its growth strategy by advancing its attractive
portfolio of producing and exploration assets.
OPERATIONS
Guanaco and Amancaya mines, Antofagasta Province, Chile
(100% interest)
Open pit and underground.
Casposo/Manantiales Mine Complex, San Juan Province, Argentina
(100% interest)
Gold and silver mine currently in care and maintenance. Strategy is to restart profitable mining
operations.
EXPLORATION
CHILE
ARGENTINA
Paleocene Belt, Chile
Guanaco District
Amancaya District
Las Pampa District
Triassic Choiyoi Belt
Indio Belt
Deseado Massif
EQUITY INVESTMENTS
Unico Silver Limited, an ASX listed company
Rawhide Mine, private vehicle, Fallon, Nevada, USA
Ensign Minerals Inc., private vehicle, Utah, USA
Pampa Metals Corp, a CSE listed company
[1]
Refer to Media Release dated 4 February 2021: Austral Completes Acquisition of Revelo Resources
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/187658