Corporate Profile
Introduction
Latin Gold Limited ("Latin Gold") is a public company listed on the Australian Stock Exchange. Latin Gold listed on 6 June 2001 and has offices in Perth, Western Australia.
The Company is currently exploring the Narracoota gold - copper - nickel project located 80km north of Meekatharra.
Sale of Paron and Mining Information
On 20 December 2010, Latin Gold Limited (Latin or the Company) announced to the ASX that it had reached agreement with Coronet Metals Inc (Coronet), a British Columbia, Canadian registered company, for the sale of 100% of its interest in the Paron Gold Project located in Peru and certain mining information on other projects located within South America.
Coronet is a public company, is listed on the TSX Venture Exchange Inc in Toronto, Canada (code/symbol CRF.H) and its sole activity was that of investigating business opportunities and mineral properties for potential acquisition and subsequent exploration and development.
Pursuant to the Agreement, US$3.75 million of the purchase consideration was placed in escrow (Escrow Amount) pending receipt by Latin and Coronet of a tax certificate issued by the Peruvian government.
Following receipt of the tax certificate Coronet was required to release the Escrow Amount to Latin.
The Directors of Latin advise that instead of releasing the Escrow Amount, Coronet sought to renegotiate the Agreement as a result of some post-closing issues relating to the Paron Gold Project.
Settlement terms
Following extensive negotiations, the parties agreed that it was in the best interests of the shareholders of Latin and Coronet to resolve the matter and a settlement deed has now been executed.
Pursuant to the settlement, Coronet agreed to:
- immediately pay US$1,500,000 to Latin; and
- issue such number of shares as is equal to US$1,000,000, based on Cornet's 30 day VWAP following the initial gold pour from the Paron Gold Project.
Pursuant to the settlement, Latin agreed to:
- place 3,261,183 Coronet shares in escrow until 2 October 2012; and
- place a further 3,261,183 Coronet shares in escrow until 2 October 2013.
Consideration received and to be received
The total consideration received, or to be received, by Latin pursuant to the Share Purchase Agreement and the Asset Sale Agreement with Coronet is as follows:
- Cash received: US$1.75million
- Coronet shares held: 6,522,366
- Cash to be received pursuant to settlement: US$1.5million
The balance of the sale consideration, being US$7.5 million, is milestone linked with US$1.5 million payable within 5 days of commencement of construction of site works (directly related to the installation of a mine or mill) and a bonus of US$1.0 million payable at the same time if the JORC resource exceeds 275,000 ounces of gold. US$1.0 million (in Coronet shares) is payable on the initial gold pour, US$2.0 million is then payable within 5 days of the 12 month anniversary of the initial gold pour and US$2.0 million is payable within 5 days of the 24 month anniversary of the initial gold pour.
In addition to the sale consideration, Coronet shares to the value of US$2.5 million will be issued within 5 days of a JORC inferred resource of equal to or greater than 250,000 ounces of gold being defined within the Paron Deeps exploration target (the Paron Deeps target is the undrilled potential hanging wall extension to the existing Paron resource).
An overriding 1.0% gross royalty on all production from Paron in excess of 200,000 ounces is also payable.
Pursuant to Listing Rule 11.2, the sale was subject to and conditional upon approval by Latin shareholders. Latin shareholders approved the sale on 2 April 2011.
