MX Gold to sell two mining assets to Cameo Cobalt
2019-01-14 16:13 ET - News Release
See News Release (C-MXL) MX Gold Corp
Mr. Dan Omeniuk of MX Gold reports
MX GOLD CORP. ANNOUNCES PROPOSED SALE OF MINING INTERESTS
MX Gold Corp. has signed two binding agreements that collectively propose to sell the company's remaining mining assets in an arm's-length transaction to Cameo Cobalt Corp., a British Columbia company listed on the TSX Venture Exchange, for a combination of cash, common shares in the purchaser and the grant of a 50-per-cent net profit interest in its two mining properties going forward.
No securities of the company will be issued in connection with the transaction. No changes to the board or management team are expected at this time. No new insiders will be created in connection with the transaction. The company is currently subject to a cease trade order due to the failure to file a technical report on its previously owned Magistral joint venture interest and MAX property, which is owned by its subsidiary, FortyTwo Metals Inc. The company is also currently suspended from trading by the exchange. However, the company intends to apply for an application to revoke the cease trade order and resume trading with the exchange following the closing of the transaction and the sale of such property interests.
The company obtained shareholder approval of a special resolution for the sale of its mining assets, as required under the Business Corporations Act (British Columbia), and an ordinary resolution to approve the company's proposed change of business from a junior natural resource company to a Tier 2 technology issuer at its annual general and special meeting that occurred on July 11, 2018. The company anticipates that it will need to address further comments in order to resume trading with the exchange, including the obligation to meet initial listing requirements of the exchange.
Sale of mining assets
The company has entered into the following two agreements to sell its mining assets:
- FortyTwo Metals share purchase agreement dated Jan. 11, 2019, whereby the company has agreed to sell to the purchaser all of the issued and outstanding shares of FortyTwo Metals for aggregate consideration of $578,982.76, consisting of $53,982 to renew certain mineral claims of the Max property owned by FortyTwo Metals, $150,000 in cash and five million common shares of the purchaser at a deemed issue price of 7.5 cents per share. The purchaser has also agreed to grant a 50-per-cent net profit interest on gross cash income from the Max property to the company (less all expenses incurred to produce such income, which is payable only once the purchaser has recouped from net profits its capital investment in the Max property and all preproduction costs). FortyTwo Metals holds the past-producing Max molybdenum mine and mill located in British Columbia as well as a $730,000 reclamation bond for the Max property held with the British Columbia Ministry of Mines. FortyTwo Metals is also subject to certain legacy liabilities associated with prior operations.
- Willa property purchase, sale and assignment agreement dated Jan. 11, 2019, whereby the company has agreed to sell to the purchaser the advanced-stage Willa property in British Columbia for a purchase price of $1 and assign certain legacy obligations associated with the Willa property, including a net smelter royalty, advance royalty payments, and the requirement to retransfer the property back to the original optionors if the property is not in commercial production on or prior to Sept. 28, 2020, with the underlying mineral claims in good standing for a period of no less than three years. The purchaser has also agreed to grant a 50-per-cent net profit interest on gross cash income from the Willa property to the company (less all expenses incurred to produce such income, which is payable only once the purchaser has recouped from net profits its capital investment in the Willa property and all preproduction costs).