Goldplay Exploration said that it has received approval on an option agreement with SSR Mining under which it will buy a 100% stake in the San Marcial Project in Sinaloa State, Mexico.
As consideration to exercise the option agreement, the Company will, over a three-year option period, pay SSR Mining an aggregate of $2,575,000 in cash, issue to SSR Mining an aggregate of 3,500,000 common shares of the Company and incur an aggregate of $3,000,000 in exploration expenditures on San Marcial.
The Company has also granted SSR Mining the right to purchase common shares in any future equity financing that the Company may complete during the next year.
This grant of participation rights will provide SSR Mining the right to purchase that number of common shares being offered by the Company in such financing as is equal to SSR Mining’s then percentage interest in the issued share capital of the Company, for the consideration and on the same terms and conditions as offered to the other potential subscribers under such financing.
The Company must also on or before May 3, 2021 complete an updated resource estimate report conforming to the standards of NI 43-101.
The updated resource estimate (“Resource Estimate”) will form the basis for the NSR royalty to be granted and the purchase price related to the buy-back rights granted to the Company.
The NSR royalty granted to SSR Mining will range between 0.5% – 1.5% as determined from the results of the NI 43-101 updated gold equivalent resource estimate.
SSR Mining will also grant the Company a corresponding buy back right at a purchase price of no less than $500,000 for a gold equivalent resource estimate of less than or equal to 500,000 ounces, $1.25-million for a gold equivalent resource estimate up to one million ounces, $2.0-million for up to two million ounces, and $500,000 for each 500,000-ounce increment above two million ounces.
Goldplay has now made the first option payments, having paid $75,000 cash and issued 1,250,000 common shares. As required by applicable securities laws, the shares are subject to a hold period expiring four months plus a day after the date of their issuance.
Goldplay CEO Marcio Fonseca said: “We are extremely pleased to have completed the San Marcial option agreement. The San Marcial Project together with the El Habal Project form the cornerstone to the discoveries, resource and project developments for Goldplay in the Rosario Mining District.
“We have an experienced team working full time on site with >10 years track record of discoveries in the Rosario Mining District, and a modern exploration office set up in Rosario. We look forward to developing a continuous flow of results with the upcoming drilling program, resource updates and business developments.”
The Qualified Person under the NI 43-101 Standards of Disclosure for Mineral Projects for this news release is Marcio Fonseca, President and CEO of Goldplay, who has reviewed and approved its contents.
Source: Company Press Release.