Gogold Resources Inc. Announces Sale of Santa Gertrudis Project to Agnico Eagle Mines Limited FOR US$80 Million
GOGOLD RESOURCES INC. ANNOUNCES SALE OF SANTA GERTRUDIS PROJECT TO
AGNICO EAGLE MINES LIMITED FOR US$80 MILLION
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR RELEASE, PUBLICATION,
DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR
INTO THE UNITED STATES
HALIFAX, NOVA SCOTIA - (September 5, 2017) – GoGold Resources Inc. (“GoGold” or the
“Company”) ( TSX:GGD) is pleased to announce that it ha s entered into definitive agreements (the
“Agreements”) with Agnico Eagle Mines Limited (“Agnico”) to sell its interest in the Santa Gertrudis
gold project (the “Project”), located in Sonora, Mexico (the “Transaction”).
Pursuant to the terms of the Agreeme nts, GoGold will receive total cash consideration of US$80 million
(less a working capital adjustment estimated to be approximately US$280,000 at closing of the
transaction) and will be granted a 2% NSR on the Project. Agnico will retain the option to buy back 1%
of the NSR for US$7.5 million. Following announcement of the Transaction and the satisfaction by
GoGold of certain conditions precedent, Agnico will advance to GoGold an aggregate of US$7.5 million
in cash via a subordinated secured term loan bear ing interest at 10% per annum. The term loan, along
with accrued and capitalized interest, shall be repaid upon closing of the Transaction by way of a set off
against the total cash consideration. Agnico has entered into a subordination and postponement agreement
in respect of the Company’s existing senior revolving credit facility with the Bank of Montreal. GoGold
has received the required consents for the Transaction from Bank of Montreal under the senior revolving
credit facility and received a waiver of compliance with its total debt leverage and interest coverage ratio
covenants for the fiscal quarter ended September 30, 2017, which may be extended to February 28, 2018
(the outside date for closing) in certain circumstances.
Brad Langille, President and CEO of GoGold stated, “We are very pleased to announce this Transaction
with Agnico Eagle. We believe it demonstrates the value generated and progress made at Santa Gertrudis
by the GoGold team since acquiring the Project in 2014. Agnico Eagle has a stron g track record of
advancing and developing projects and we believe GoGold shareholders are well positioned to benefit
from the future potential of the Project through our retained royalty. The Transaction will enable GoGold
to significantly strengthen the Company’s balance sheet through repayment of our senior revolving credit
facility, position the Company well as the Parral Tailings project ramps up to its full potential, while also
allowing us to continue to pursue further opportunities in Mexico and beyond.”
The net proceeds of the Transaction will be used to repay the Company’s senior revolving credit facility,
reduce outstanding trade and other payables and for working capital purposes. Completion of the
Transaction is subject to satisfactory completion by Agnico of due diligence in respect of Santa Gertrudis
and customary closing conditions including the receipt of Mexican anti-trust approval. The Transaction is
not subject to a shareholder vote and is expected to close in the fourth calendar quarter of 2017.
Advisors and Counsel
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BMO Capital Markets acted as financial advisor to GoGold and Fasken Martineau DuMoulin LLP acted
as GoGold’s legal advisor. Davies Ward Phillips & Vineberg LLP acted as Agnico’s legal advisor.
About GoGold Resources
GoGold Re sources (TSX: GGD) is a Canadian -based silver and gold producer focused on operating,
developing, exploring and acquiring high quality projects in Mexico. The Company’s Parral Tailings
project is one of the lowest cash cost silver producers in the world. H eadquartered in Halifax, NS,
GoGold is building a portfolio of low cost, high margin projects. For more information visit
gogoldresources.com.
For further information please contact:
Brad Langille, President and Chief Executive Officer
T: 902-482-1998
Email: [email protected]
Steve Low, Corporate Development
T: 416-855-0435
Email: [email protected]
Or visit: www.gogoldresources.com
CAUTIONARY STATEMENT:
The securities described herein have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not
be offered or sold within the United States or to, or for the benefit of, U.S. persons (as defined in
Regulation S under the U.S. Securities Act) except in compliance with the registration requirements of the
U.S. Securities Act and applicable state securities laws or pursuant to exemptions therefrom. This release
does not constitute an offer to sell or a solicitation of an offer to buy of any of GoGold’s securities in the
United States.
This news release may contain "forward -looking information" as defined in applicable Canadian
securities legislation. Al l statements other than statements of historical fact, included in this release,
including, without limitation, statements regarding the completion of the transactions contemplated by the
Agreements, the use of proceeds from the amounts received by GoGold in connection with the
transactions contemplated by the Agreements and the future plans and objectives of GoGold, constitute
forward-looking information that involve various risks and uncertainties. Forward -looking information is
based on a number of facto rs and assumptions which have been used to develop such information but
which may prove to be incorrect, including, but not limited to, assumptions in connection with the
continuance of GoGold and its subsidiaries as a going concern, general economic and m arket conditions,
mineral prices, the accuracy of mineral resource estimates, and the ability to complete the transactions
contemplated by the Agreements. There can be no assurance that such information will prove to be
accurate and actual results and futu re events could differ materially from those anticipated in such
forward-looking information.
Important factors that could cause actual results to differ materially from GoGold's expectations include
Agnico being satisfied with the results of its due dili gence, any deficiency in working capital on the
closing date of the transaction, exploration and development risks associated with the GoGold’s projects,
the failure to establish estimated mineral resources or mineral reserves, volatility of commodity pric es,
variations of recovery rates and global economic conditions. For additional information with respect to
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risk factors applicable to GoGold, reference should be made to GoGold's continuous disclosure materials
filed from time to time with securities regu lators, including, but not limited to, GoGold's Annual
Information Form. The forward -looking information contained in this release is made as of the date of
this release. GoGold assumes no obligation to update these forward -looking statements, except as
required by applicable securities legislation.