Aura Minerals Inc. (TSX: ORA)
(“
Aura”) and
Para Resources Inc.
(TSXV: PBR) (WKN: A14YF1) (OTC: PRSRF)
(“
Para”) announce that they have entered into a
binding term sheet (the “
Term Sheet”) along with
PPG Arizona Holdings LP (“
PPG”), an affiliate of
Pandion Mine Finance, LP, pursuant to which Aura will purchase from
Para all of the issued and outstanding shares of its wholly-owned
subsidiary Z79 Gold (USA) Corp. (“
Z79”) for
nominal cash consideration of US$1 and the assumption by Aura of
liabilities owing from Para to PPG under the Restructured PPF (as
defined below) of approximately US$35 million, subject to the Buy
Out Option (as defined below) (the “
Share
Purchase”).
Z79 owns (i) 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 (ii) a 94% interest in TR-UE Vein Exploration, Inc.
(“TR-UE Vein”), which in turn owns various options
to acquire parcels of land adjacent to the Gold Road Project.
Prior to or concurrent with the Share Purchase,
the Term Sheet contemplates that:
- the parties will enter into an amendment to the pre-paid
forward gold purchase agreement dated August 3, 2018 among Para,
Z79, GRMC and PPG pursuant to which, among other things, Para’s
outstanding obligations thereunder shall be restructured and
assigned to Aura (the “Restructured PPF”).
Pursuant to the Restructured PPF, Aura will have the option (the
“Buy Out Option”) to satisfy in full all
obligations owing under the Restructured PPF for US$24 million
payable on or prior to the end of 12 months from closing of the
Share Purchase;
- PPG will advance up to US$2 million to Para for Para to repay
the balance of various accounts payable owing in connection with
the Gold Road Project; and
- Aura will enter into a subscription agreement with Z79 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.
(collectively with the Share Purchase, the
“Transactions”).
Upon completion of the Transactions, it is
expected that Aura will own 100% of each of GRMC and TR-UE
Vein.
The closing of the Transactions is expected to
occur on or about March 13, 2020.
Completion of the Transactions is subject to,
among other things, (i) the parties reaching agreement on
definitive documentation, (ii) Para receiving any required
shareholder approval and approval of the TSX Venture Exchange and
(iii) satisfactory completion by Aura of due diligence.
In connection with entering into of the Term
Sheet, shareholders of Para holding over 50% of all of Para’s
issued and outstanding shares have agreed to vote in favour of the
Transactions pursuant to any shareholder approval requirements
triggered by the Transactions under applicable law.
Mr. Rodrigo Barbosa, President and CEO of Aura,
said today, “We believe that Gold Road has a good strategic fit
with Aura’s portfolio. With our technical and managerial expertise
we should be able to help Gold Road unlock value and grow.”
Mr. Geoff Hampson, Chairman and CEO of Para,
said today, “This transaction, if concluded, ends Para’s
involvement with the Gold Road Mine. Management and the Board of
Directors have concluded that selling the shares of Z79 in return
for a release by PPG of all of Para’s obligations under the PPF is
in the best interests of Para Resources Inc. and our
shareholders.”
Forward-Looking Information
This press release contains “forward-looking
information” and “forward-looking statements”, as defined in
applicable securities laws (collectively, “forward-looking
statements”) which include, but are not limited to,
statements with respect to the activities, events or developments
that Aura and Para expect or anticipate will or may occur in the
future.
Known and unknown risks, uncertainties and other
factors, many of which are beyond the ability of Aura and Para to
predict or control, could cause actual results to differ materially
from those contained in the forward-looking statements. Specific
reference is made to Aura’s most recent Annual Information Form on
file with certain Canadian provincial securities regulatory
authorities and Para’s most recent Management’s Discussion and
Analysis on file with certain Canadian provincial securities
regulatory authorities for a discussion of some of the factors
underlying forward-looking statements.
All forward-looking statements herein are
qualified by this cautionary statement. Accordingly, readers should
not place undue reliance on forward-looking statements. Neither
Aura nor Para undertake any obligation to update publicly or
otherwise revise any forward-looking statements whether as a result
of new information or future events or otherwise, except as may be
required by law. If either Aura or Para does update one or more
forward-looking statements, no inference should be drawn that
either will make additional updates with respect to those or other
forward-looking statements.
About Aura 360° Mining
Aura is focused on mining in complete terms –
thinking holistically about how its business impacts and benefits
every one of its stakeholders: Aura’s company, Aura’s shareholders,
Aura’s employees, and the countries and communities Aura serves.
Aura calls this 360° Mining.
Aura is a mid-tier gold and copper production
company focused on the development and operation of gold and base
metal projects in the Americas. Aura's producing assets include the
San Andres gold mine in Honduras, the Ernesto/Pau-a -Pique gold
mine in Brazil and the Aranzazu copper-gold-silver mine in Mexico.
In addition, Aura has two additional gold projects in Brazil, Almas
and Matupá, and one gold project in Colombia, Tolda Fria.
About Para Resources
Para is a junior gold mining and exploration
company. Para owns projects that include existing or near-term
mining and milling operations as well as highly prospective
exploration targets. Para has acquired fully permitted mines and
facilities with adjacent properties that have either been past
producers or where there are an abundance of small artisanal
miners, dramatically reducing the exploration risk.
Para is unique in that the Insiders have
invested more than US $30 million of their own capital and own
approximately 70% of the Para’s equity.
For further information, please contact:
Rodrigo Barbosa
C. Geoffrey Hampson
President &
CEO
Chairman &
CEO305-239-9332
geoff@pararesourcesinc.comwww.auraminerals.com
pararesourcesinc.com/
No securities regulatory authority has either approved or
disapproved of the contents of this news release. This press
release is for information purposes only.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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