LaArena-IMG receives $48.55 millionApril 06, 2009 Business Combination of Mexican Silver Mines Ltd. and Rio Alto Mining Limited
Rio Alto
Rio Alto was formed to earn into and eventually acquire the La Arena gold-copper project ("La Arena Project" or the "Project") in Peru from IAMGold Quebec Management Inc. ("IAMGold"), a subsidiary of IAMGold Corporation, and to further explore and develop the Project.
Pursuant to an option agreement ( "La Arena Agreement") dated September 15, 2008 entered into between Rio Alto and IAMGold, Rio Alto may earn up to a 38.7% interest in La Arena Project by incurring US$30 million on La Arena Project during the Option Period (as defined below). The remaining 61.3%of La Arena Project may be acquired by Rio Alto by its acquisition of the shares of La Arena S.A., a subsidiary of IAMGold and the registered and beneficial owner of all of the shares of La Arena S.A., for cash payments, including an initial US$1 million option payment, to IAMGold totalling US$48.55 million over a two-year (extendable under certain conditions to three years) period (the "Option Period") commencing on the date on which the initial US$1 million option payment is made to IAMGold. Also, pursuant to La Arena Agreement, IAMGold is entitled to receive that number of Rio Alto shares equal to 5.5% of number of Rio Alto shares outstanding on a diluted basis until such time as Rio Alto has acquired a 100% interest in La Arena Project. La Arena Agreement will be superceded by a definitive agreement (the "Definitive Agreement") concurrent with the payment of initial US$1 million option payment.