Batero Gold Corp. (CVE:BAT) says that private Peruvian gold producer Consorcio Minero Horizonte has taken a 35 per cent stake in the company, as per a strategic alliance agreement between the two parties struck in November.
The deal has raised about $20 million for the development of the Batero-Quinchia project in Colombia. The agreement included 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.
Batero said Monday that the escrowed proceeds from the subscription receipts offering of roughly $12 million have been released, and that 18.46 million subscription receipts have been converted into shares and share purchase warrants.
As a result, Horizonte, with a now 35 per cent interest in Batero, has exercised its right to appoint two nominees to Batero's board of directors - Felix Navarro-Grau Hurtado and Ernesto Bendezu Flores.
The company said that Juan David Uribe, a new nominee, has also been appointed to the board, while Nick Demare, Leonard Harris, and Darrell Podowski have resigned.
"On behalf of the Board, we are happy to welcome Felix Navarro-Grau Hurtado, Ernesto Bendezu Flores, and Juan David Uribe to the Board. Their collective extensive mining and business experience are expected to greatly benefit Batero and its shareholders," said Batero president and CEO, Brandon Rook.
The new funds from Horizonte will be used to develop the Batero-Quinchia gold project in Colombia, as well as for working capital purposes.
The company said the cash is sufficient to fund the development of its project through to completion of a technical study, compliant with Colombian legislation for production.
Batero will also mantain its 100 per cent royalty-free stake in the project and will benefit from Horizonte's operational expertise, as well as the premium at which the financing was transacted - minimizing dilution for Batero's shareholders.
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.
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