The closing of the share purchase is expected to occur on or about March 20, 2020
Aura Minerals Inc. (TSX: ORA) (“Aura”) and Para Resources Inc. (TSXV: PBR) (WKN: A14YF1) (OTC: PRSRF) (“Para”) announce that they have entered into a definitive share purchase agreement (the “Share Purchase Agreement”) pursuant to which Aura will purchase from Para all of the issued and outstanding shares of its wholly-owned subsidiary Z79 Resources, Inc. (“Z79”), a transaction which was previously contemplated by a term sheet announced by Aura and Para on February 10, 2020 (the “Share Purchase”).
Z79 owns a 94% interest in Gold Road Mining Corp. (“GRMC”), which in turn owns the Gold Road Mine located in Arizona (the “Gold Road Project”) and various options to acquire parcels of land adjacent to the Gold Road Project, among other things.
Aura will purchase Z79 for nominal cash consideration of US$1 and the assumption of liabilities owing from Para to PPG Arizona Holdings LP (“PPG”), an affiliate of Pandion Mine Finance, LP, under an amended and restated pre-paid forward gold purchase (the “A&R PPF”) which has also been executed by each of Para, PPG, Z79 and GRMC. Pursuant to the terms of the A&R PPF, Z79 and GRMC shall pay to PPG approximately US$35 million in cash pursuant to scheduled payments, subject to the option of Z79 and GRMC to satisfy in full all obligations owing under the A&R PPF for US$24 million payable on or prior to the end of 12 months from closing of the Share Purchase.
Aura has also entered into a subscription agreement with Z79 (the “Subscription Agreement”, and together with the Share Purchase Agreement and the A&R PPF, the “Transaction Documents”) pursuant to which Aura will advance US$8 million in two equal tranches, with the first advance occurring on closing of the Share Purchase and second one month after closing, and such amounts will be used for the development and restart of the Gold Road Project.
The closing of the Share Purchase is expected to occur on or about March 20, 2020. Completion of the Share Purchase is subject to, among other things, Para receiving any required shareholder approval and approval of the TSX Venture Exchange.
Shareholders of Para holding over 50% of all of Para’s issued and outstanding shares have agreed to vote in favour of the Share Purchase pursuant to any shareholder approval requirements triggered under applicable law, as previously announced by Aura and Para.
Para CEO, Javier Cordova, states, “The closing of this transaction allows Para to focus on our Colombian strategy and to move forward with the acquisition of the shares Operadora, transitioning into a producing and profitable mining and exploration company.”
Source: Company Press Release