TORONTO, ONTARIO--(Marketwired - Dec. 4, 2013) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO U.S. NEWS WIRE SERVICES
TOLIMA GOLD INC. ("Tolima") (TSX VENTURE:TOM) is pleased to announce today that Wolverine Minerals Corp. ("Wolverine") (TSX VENTURE:WLV) has entered into a share purchase agreement dated December 4, 2013 (the "Agreement") with Tolima's subsidiaries, Remedios Gold Holdings S.A. ("Remedios Gold"), Tolima Gold (Barbados) Corp. and Herbo Assets S.A. ("Herbo"), pursuant to which Wolverine has agreed to acquire up to an 80% interest in Remedios Gold from Herbo (the "Transaction"). Through its wholly owned subsidiary, Remedios Gold S.A.S., Remedios Gold holds six mining concessions (collectively, the "Remedios Property"), covering a total area of 633 hectares, in the Remedios/Segovia mining district in Antioquia, Colombia, on which are located two existing mines and a processing plant with an installed capacity of 100 tons per day.
In connection with the execution of the Agreement, Wolverine paid Herbo $700,000 (the "Advance") as an initial deposit. Pursuant to the terms of the Agreement, Wolverine will have up to 60 days to complete its due diligence with respect to the Transaction. Within five business days of giving notice to Herbo that it wishes to proceed with the Transaction (the "Due Diligence Satisfaction Date"), it will pay to Herbo, in addition to the Advance: (i) $500,000 on the date that is six months after the Due Diligence Satisfaction Date; and (ii) $500,000 on the date that is twelve months after the Due Diligence Satisfaction Date (collectively, the "Cash Consideration") for a total purchase price of $1,700,000. Upon payment of the entire Cash Consideration, Wolverine will acquire 30% of the issued and outstanding shares of Remedios Gold. Wolverine will acquire an additional 50% interest in Remedios Holdings, for a total interest of 80%, if it incurs no less than $2,500,000 in work costs on the Remedios Property prior to the third anniversary of the Due Diligence Satisfaction Date. As additional consideration, Herbo will be entitled to a 2.5% net smelter return royalty on all production from the Remedios Property. Wolverine will also be entitled to appoint directors to the board of Remedios Gold and its subsidiary in proportion to its share position, as provided for in the Agreement.
In the event that Wolverine is not satisfied with the results of its due diligence, and determines not to proceed with the Transaction, the Advance will be treated as a secured loan. The loan will mature on the date that is six months following Wolverine's determination not to proceed with the Transaction (subject to Wolverine's right, in its sole discretion, to extend such maturity date by an additional six months), will bear interest at the rate of 10% per annum, and will be secured by 51% of the outstanding shares of Remedios Gold, which have been deposited into escrow with Wolverine's Colombian counsel pursuant to the terms of a share pledge agreement among the parties for this purpose, and general security over 51% of the assets of Remedios Gold and its subsidiary.
Completion of the Transaction is subject to a number of conditions as provided for in the Agreement, including the approval of the TSX Venture Exchange and the completion of due diligence by Wolverine. A copy of the Agreement will be filed on SEDAR under the respective profiles of Wolverine and Tolima.
Information Concerning Tolima
Tolima is a gold exploration and development company with contractual interests in gold properties in Colombia. Tolima's mineral properties are the Remedios Project, located in the Remedios/Segovia mining district, including the San Pablo and Bartola mines, located in the Antioquia Department of Colombia; the Ancal/Marmato Project, located in the Marmato/Caramanta district in the Caldas and Antioquia Departments of Colombia; and the Nortol project, including the newly acquired Papayo property, located in the Northern part of the Tolima Department of Colombia. Tolima continues to explore opportunities for the acquisition of additional mining interests in prospective mining districts in Colombia.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management of Tolima regarding the Transaction. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, and include discussion of what the parties must do to complete the Transaction. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Tolima will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) the occurrence of any events that prevent the parties from performing the acts necessary to complete the Transaction, including Wolverine being unsatisfied with the results of its due diligence investigation; (2) failure to obtain the approval of the TSX Venture Exchange; (3) current economic conditions and the state of mineral exploration and mineral prices in general; and (4) other factors beyond the parties' control. These forward-looking statements are made as of the date of this news release and Tolima assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements, except in accordance with applicable securities laws. Additional information about Tolima and these and other assumptions, risks and uncertainties, are available in its public filings with Canadian securities regulators, available under its profile on SEDAR at www.sedar.com.
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.