Corporate Reorganization to Optimize Santa CRUZ Operations
CORPORATE REORGANIZATION TO OPTIMIZE SANTA CRUZ OPERATIONS
January 15, 2020 Vancouver, B.C. – Patagonia Gold Corp. (“Patagonia” or the “Company”)
(TSXV: PGDC) announces that it has initiated a corp orate reorganization (the
“Reorganization”), which will result in Patagonia Gold SA (“PGSA”) and Cerro Cazador SA
(“CCSA”) merging and continuing as one legal entity. The Reorganization will facilitate the
development of the Cap Oeste gold / silver underground project (“Cap Oeste”), with Cap
Oeste and the Martha processing plant being held by the same legal entity, PGSA. It is also
expected to facilitate the development of an exploration program for the La Josefina and
La Valenciana gold / silver projects. The Reorganiz ation is expected to be completed by
the end of the first quarter 2020 and be effective as of January 1, 2020.
Following completion of the reverse-takeover betwee n Patagonia Gold plc and Hunt
Mining Corp. on July 26, 2019, two of the Company’s subsidiaries, PGSA and CCSA, held
properties and operations in the Province of Santa Cruz, Argentina. The Company is
completing the Reorganization to have these subsidi aries merged and continue as
Patagonia Gold SA. In connection with this Reorgani zation, the Company also
renegotiated the agreement between PGSA and the Pro vincial State owned Mining
Company, Fomento Minero de Santa Cruz Sociedad del Estado (“Fomicruz”), pursuant to
which Fomicruz held a 10% interest in PGSA, and the farm-in agreement between CCSA
and Fomicruz regarding the La Josefina and the La V alenciana properties. Accordingly,
Fomicruz agreed to reduce its interest in PGSA to 5 % and to hold a 2% royalty on the
properties it contributed to PGSA, with the exception of the La Josefina and La Valenciana
properties, where Fomicruz will retain a 5% royalty.
Christopher van Tienhoven, Chief Executive Officer of Patagonia, noted: “The
Reorganization will permit the Company to capture efficiencies of its operations in Santa
Cruz, with a view to optimizing and reducing costs. In addition, the renegotiation of the
agreement with Fomicruz is important in terms of se curing the prospective La Josefina
and La Valenciana properties, as well as aligning shareholder interests.”
About Patagonia Gold
Patagonia Gold Corp. is a mining and development co mpany listed on the TSX Venture
Exchange. The Company seeks to grow shareholder val ue through exploration and
development of gold and silver projects in the Pata gonia region of Argentina. The
Company is primarily focused on the Calcatreu project in Rio Negro and the development
of the Cap-Oeste underground project. Patagonia, in directly through its subsidiaries or
under option agreements, has mineral rights to over 350 properties in several provinces
of Argentina and Chile and is one of the largest landholders in the Province of Santa Cruz,
Argentina.
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For more information, please contact:
Dean Stuart
T: 403 617 7609
Christopher van Tienhoven, Chief Executive Officer
Patagonia Gold Corp
T: +54 11 5278 6950
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.
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements, including, but not limited
to, statements about the timing of the completion o f the corporate reorganization, the
impacts of the corporate reorganization including t he agreements with Fomicruz and
capturing efficiencies, the Company’s focus on grow ing shareholder value and the
development of the Cap Oeste underground project, a dvancement of the Calcatreu
project, preparation of the Calcatreu feasibility study and the Company’s future plans and
intentions. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”,
“plan”, “intend”, “anticipate”, “believe”, “estimat e”, “predict” or “potential” or the
negative or other variations of these words, or similar words or phrases, have been used
to identify these forward-looking statements. These statements reflect management’s
current beliefs and are based on information currently available to management as at the
date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many
factors could cause actual results, performance or achievements to differ materially from
the results discussed or implied in the forward-loo king statements. These factors should
be considered carefully and readers should not plac e undue reliance on the forward-
looking statements. Although the forward-looking st atements contained in this news
release are based upon what management believes to be reasonable assumptions, the
Company cannot assure readers that actual results will be consistent with these forward-
looking statements. These forward- looking statemen ts are made as of the date of this
news release, and the Company assumes no obligation to update or revise them to reflect
new events or circumstances, except as required by law.