Amarillo Gold Announces the Sale of an NSR Royalty to Royal Gold for USD $10.8 Million
June 29 2018 - 12:57PM
Amarillo Gold Corporation (“Amarillo” or the
“Company”) (TSX.V:AGC)
today
announces the entry into an agreement for sale of a perpetual 1.75%
Net Smelter Return Royalty on the Mara Rosa gold project (the
“Royalty Agreement”) to RG Royalties, LLC, a wholly-owned
subsidiary of Royal Gold, Inc. (NASDAQ:RGLD) (“Royal Gold”), for
USD $10.8 million (approximately CAD$14.4 million).
The proceeds of the sale are expected to be used
towards recapitalizing the balance sheet of the Company in the
least dilutive manner to shareholders and to further fund ongoing
exploration and development activities at Mara Rosa. The Company
expects to use a portion of the proceeds from the Royalty to repay
the gold-linked credit facility that it entered into on July 31,
2014. The Company’s obligations under the Royalty will be secured
by Mara Rosa project assets; however, the Royalty Agreement
thoughtfully contemplates and permits a potential future first
ranking project financier.
Mike Mutchler, CEO of Amarillo commented: “This
highly accretive transaction marks a turning point for the Company
by providing a clean balance sheet and a well-funded
treasury. In addition, the overall robust economics of the
Mara Rosa gold project remain intact. I am very pleased to welcome
Royal Gold as a significant stakeholder. Their rigorous due
diligence process and well-respected reputation are a testament to
the quality of the Mara Rosa assets and a vote of confidence in the
Amarillo team. I would like to thank Royal Gold and our
existing shareholders for their support, as we transition the
Company to an emerging developer.”
The closing of the sale of the Royalty is
subject to the approval of the TSX Venture Exchange (the
“TSX-V”).
ABOUT
AMARILLO
Amarillo is developing an economic, open pit
gold resource at its Mara Rosa Project in the mining friendly
jurisdiction of Goias State in Brazil. An Updated Pre-Feasibility
Study (NI 43-101 technical report) for the Mara Rosa Project was
filed on SEDAR on May 4, 2017. The Mara Rosa Project was awarded
its main (LP) permit which provides the social and environment
permission to mine. Amarillo is progressing toward obtaining an
installation permit (LI). The Posse Deposit at the Mara Rosa
Project contains 540,567 ounces of gold in the Proven category from
9.27MT at 1.81 g/t Au, and 456,968 ounces in the Probable category
from 9.74MT at 1.46 g/t Au, for total Reserves of 997,536 ounces
from 19.01 MT at 1.63 g/t Au. In addition to the Mara Rosa Project,
Amarillo has an advanced exploration project with excellent grades
at Lavras do Sul, Brazil. A Mineral Resource Estimate Study (NI
43-101 technical report) for Lavras do Sul was filed on SEDAR on
October 4, 2010. The Lavras do Sul Project is an advanced
exploration stage property (190 sq. km.) comprising of more than 22
prospects centered on historic gold workings. The initial resource
estimate at the Butia prospect reported 215,000 ounces of gold in
the Indicated category from 6.4 MT at 1.05 g/t Au, and 308,000
ounces of gold in the Inferred category from 12.9 MT at 0.74 g/t Au
using a 0.3 g/t cut-off grade. Both projects have excellent nearby
infrastructure.
Mike Mutchler, the President and Chief Executive
Officer of the Company, is a Qualified Person as defined by NI
43-101 guidelines, and has reviewed and approved the scientific and
technical disclosure in this news release.
ABOUT ROYAL
GOLD
Royal Gold, Inc., together with its
subsidiaries, acquires and manages precious metal streams,
royalties, and similar interests. It focuses on acquiring stream
and royalty interests or to finance projects that are in production
or in development stage in exchange for stream or royalty
interests. As of June 29, 2018, the company owns interests on 192
properties on six continents, including interests on 39 producing
mines and 22 development stage projects.
For further information, please contact: |
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Mike
Mutchler |
or
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Karen Mate |
President & CEO |
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External
Communications |
416-294-0736 |
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416-230-6454 |
mike.mutchler@amarillogold.com |
|
karen.mate@amarillogold.com |
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82 Richmond St.
East |
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Suite 201 Toronto,
ON |
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Canada, M5C 1P1 |
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Website:
www.amarillogold.com |
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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.
FORWARD LOOKING STATEMENTS:
This news release contains Forward Looking
Statements regarding the Company’s current expectations regarding
future events, including with respect to the Company’s business,
operations and condition, management’s objectives, strategies,
beliefs and intentions, the completion of the sale of the Royalty
(as contemplated hereby), the anticipated timing of closing of the
sale of the Royalty, the use of proceeds therefrom, the need for
any future project financing and the ability of the Company to
obtain any such financing in the future. Various factors may
prevent or delay our plans, including but not limited to, the
trading price of the Common Shares, the TSX-V not providing its
conditional or final approval for the sale of the Royalty, certain
lenders not advancing funds as required, contractor availability
and performance, weather, access, mineral prices, and success and
failure of the exploration and development carried out at various
stages of the program. Permission from the Government and community
is also required to proceed with future mining production. Readers
should review the Company’s ongoing quarterly and annual filings,
as well as any other additional documentation comprising the
Company’s public disclosure record, for additional information on
risks and uncertainties relating to these forward-looking
statements. Readers should also review the risk factors applicable
to junior mining exploration companies generally to better
understand the variety of risks that can affect the Company. The
Company undertakes no 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 me be required
by law.
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