The existing underground mine at Marmato produced 25,750 ounces of gold last year
Gran Colombia Gold is pleased to announce that it has completed the previously announced spin-off of its Marmato Mining Assets through a reverse takeover (RTO) transaction completed today with Bluenose Gold. The resulting issuer is named Caldas Gold and, subject to fulfillment of all of the requirements of the TSX Venture Exchange (TSXV), it is expected that trading of the Caldas Gold shares on the TSXV will commence on or about Friday, February 28, 2020 under the symbol “CGC”. Gran Colombia owns approximately 72% of Caldas Gold.
Commenting on the closing of the RTO transaction, Serafino Iacono, Executive Chairman of Gran Colombia, stated, “We are very pleased to complete the spin-out of our Marmato Mining Assets. With total proceeds from the equity financings of approximately CA$21.6 million, Caldas Gold is well capitalized to take the Marmato Project forward as it completes the prefeasibility study for the underground mine expansion in the first half of 2020 and continues drilling the Deep Zone mineralization. The recently released 2019 Phase 2 drilling results have further increased our confidence in the geological model and continue to demonstrate an improvement of grades in the Deep Zone below the 900 meter level versus the mineral resource block model associated with the preliminary economic assessment. In addition, the discovery of a possible new high-grade zone in the Deeps mineralization opens a new scenario for potential resource growth. Today begins a new chapter in the future of the Marmato Project.”
The Marmato Mining Assets principally comprise the existing producing underground gold mine (including the right to mine in the lower portion of the Echandia license area), the existing 1,200 tonnes per day processing plant and the area encompassing the Deeps mineralization, all located within the mining license area referred to as Zona Baja. The existing underground mine at Marmato produced 25,750 ounces of gold in 2019, representing a 3% increase over 2018, and Caldas Gold expects to produce between 32,000 and 37,000 ounces of gold in 2020.
Through completion of a private placement on February 7, 2020 and the RTO transaction, Gran Colombia has acquired an aggregate of 36,250,100 common shares and 7,500,000 share purchase warrants of Caldas Gold with an exercise price of CA$3.00 expiring December 19, 2024. With the common shares controlled by Gran Colombia representing approximately 71.8% of the outstanding common shares of Caldas Gold, Gran Colombia is a “control person” of Caldas Gold. Assuming exercise of the share purchase warrants, Gran Colombia would have control and direction over 43,750,100 common shares representing approximately 75.4% of the then outstanding common shares of Caldas Gold, after giving effect to the exercise of Gran Colombia’s warrants but assuming no exercise of any other outstanding warrants or options of Caldas Gold. Prior to the RTO transaction, Gran Colombia did not hold any securities of Bluenose. The shares acquired by Gran Colombia are presently being held only for investment purposes. Gran Colombia may from time to time in the future increase or decrease its ownership, control or direction over securities of the Caldas Gold, through market transactions, private agreements or otherwise.
Source: Company Press Release