Castle Peak Mining (CVE:CAP) has reached an agreement in principle for partner Grizal and Candel to take a 56% stake in the Ghana-focused gold explorer.
Grizal and Candel will form a new firm that will pay $2mln for 40 mln shares and warrants, a price of $0.05 per unit, which will be held by the new company.
The company will use the money for further exploration and development at its Akorade Project in Ghana, where it is working towards a preliminary economic assessment.
After the investment Grizal and Candel will hold an aggregate of around 65.3mln common shares and 40mln warrants representing 56.3% of the shares and around 64% on a fully-diluted basis.
The new firm, which will be able to nominate one director to the board of Castle Peak, will be controlled by Grizal, a "Control Person" of the company and possibly by Candel or its affiliates, which is considered an insider.
Castle Peak’s independent committee has unanimously recommended the company proceed with the investment.
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