Thursday, 29 November 2012

Batero Gold signs definitive agreement with Peruvian gold producer Consorcio Minero Horizonte to raise $20 mln

As per an initial deal struck earlier this month, Batero GoldCorp. (CVE:BAT) has agreed to a definitive strategic alliance with private Peruvian gold producer Consorcio Minero Horizonte, which will see Horizonte take a 35 per cent in Batero, raising up to $20 million for the development of the Batero-Quinchia project in Colombia. 
The agreement includes equity private placement financings, as well as an agreed loan of $2.2 million to Batero from Horizonte, all together raising up to $20 million for Batero. 
The deal will also see Batero gain a strategic alliance partner in Horizonte, which is the fifth largest gold producer in Peru, and advance the junior gold explorer's efforts in developing its Batero-Quinchia project toward a production decision. 
Batero said the financings will generate sufficient cash to fund the development of its project through to completion of a technical study, compliant with Colombian legislation for production.
It will also benefit from Horizonte's operational expertise, as well as the premium at which the financings will be transacted - minimizing dilution for Batero's shareholders. 
In addition, Batero will mantain its 100 per cent royalty-free stake in the project. 
Under the agreed financing, the company has definitively agreed to sell to Horizonte 8.9 million shares of Batero at a price of 65 cents each - a premium of around 46 per cent to the volume weighted average closing price of Batero's shares in October - and 18.46 million subscription receipts at the same price, for total proceeds of $17.79 million. 
The subscription receipts will automatically convert into a total of 18.46 million common shares, and 5.0 million common share purchase warrants, with each warrant having an exercise price of 90 cents. 
Horizonte already owns 8.9 per cent of Batero, and following the offering, and conversion of the receipts, it will hold a rough 35 per cent stake in the junior gold company. 
The offering is expected to close in early December, with the conversion of the receipts anticipated to follow in January, subject to the approval from shareholders and the TSX Venture Exchange. 
Batero said it has scheduled an annual and special general meeting on December 31 to approve the transaction. 
Also under the deal, two nominees of Horizonte will join Batero's board of directors, with one of these individuals to be selected specifically based on "technical acumen", the parties said. Horizonte will also supply Batero with any required technical personnel under the terms.             
The project has an initial resource estimate of 3.5 million ounces of indicated gold and 2.6 million ounces of inferred gold. The open pit resource estimate is based on a 0.16 grams per tonne (g/t) cut off, with 70 per cent of the project remaining unexplored.
La Cumbre is one of the three porphyry deposits at the Batero-Quinchia project, with at and near surface oxidized gold mineralization grading greater than 1.0 g/t gold in the central core of the deposit, as well as lateral and vertical continuity of gold mineralization.
The company's 4,947 metre completed drill program this year was aimed at infill drilling to upgrade the indicated mineral resources at La Cumbre to the measured resource category, and to test for potential extensions.

No comments:

Post a Comment