Nueva Esperanza is an advanced stage gold-silver exploration and development project in Chile
TDG Gold will acquire 100% of Laguna Resources Chile. (Credit: Free-Photos from Pixabay)
Kingsgate Consolidated announced that it has signed a letter of intent (LOI) to sell its Nueva Esperanza project in Chile to Canada-based TDG Gold for around AUD69.1m ($51.74m).
Nueva Esperanza, which is located in the Maricunga Belt of the Atacama Region in the northern part of the country, is an advanced stage gold-silver exploration and development project.
The project has an indicated mineral resource of 28.8 million tonnes (Mt). It contains 68.6 million ounces (Moz) silver (Ag) at an average grade of 74 grams per tonne (g/t) and 400,000oz gold (Au) at an average grade 0.43g/t.
The gold-silver project already has an environmental impact assessment approval in place to allow for its pre-development, construction, and operation.
As per the non-binding LOI signed by the parties, the consideration is planned to be made up of cash and equity. This includes CAD25m ($20.15m) in cash and a stake of 14% in TDG Gold for Kingsgate Consolidated.
Under the terms of the proposed deal, TDG Gold will acquire 100% of Laguna Resources Chile, a subsidiary of Kingsgate Consolidated.
According to Kingsgate Consolidated, the deal will provide it with financial security in the future, while retaining exposure to the gold and silver markets through its stake in TDG Gold.
Kingsgate Consolidated executive chairman Ross Smyth-Kirk said: “We are delighted with this opportunity to go into partnership with TDG, an exciting new Canadian gold and silver company.
“We’ve worked very diligently over a long period of time to get the best deal on Nueva Esperanza, and we think this will represent excellent value for our shareholders.”
For TDG Gold, the proposed deal will enable it to become a major pure precious metals focused company.
It also allows the company to target the fast tracking of the Nueva Esperanza project and also the Shasta project in Canada to production decisions by the end of 2024.
Closing of the proposed transaction will be contingent on various preceding conditions. These include due diligence, signing of a binding definitive agreement, and regulatory approvals.