Prime Mining Corp. ( Prime) has acquired the rights to earn a 100% interest in the Guadalupe de los Reyes ( now known as Los Reyes Gold Project) ( Los Reyes)
Terms of the Transaction
To acquire Minera Alamos’ interest in Los Reyes, Prime Mining Corp. has completed a cash payment of US$1,500,000 to Minera Alamos, to reimburse Minera Alamos for the cost of an option payment made to Vista Gold on April 23, 2019 (the “April Payment”), and will assume Minera Alamos’ remaining option payments of US$3,000,000 in favour of Vista Gold (collectively, the “October Payments”), as follows:
- US$1,500,000 due October 27th, 2019; and
- US$1,500,000 on the earlier of October 27th, 2021 or a production decision.
Prime Mining Corp. has also issued to Minera Alamos 9,450,000 post-Consolidation common shares and 3,350,000 common share purchase warrants entitling Minera Alamos to acquire further post-Consolidation common shares at a price $0.50 per share for a period of twenty-four months.
Concurrently with the entering into of the Assignment Agreement, Prime Mining also entered into a governance and investor rights agreement (the “Governance Agreement”) with Minera Alamos. Pursuant to the terms of the Governance Agreement, among other things, Minera Alamos holds the right to appoint one director to the board of the Company for so long as Minera Alamos holds at least 5% of the Prime Mining Corp’s outstanding common shares and to participate in future financings and transactions completed by the Company in order to maintain its pro rata equity interest in Prime Mining Corp. Minera Alamos’s initial nominee under the Governance Agreement is Bruce Durham, who has joined the board of directors of Prime Mining Corp. following completion of the Transaction.
All securities of Prime Mining Corp. issued to Minera Alamos are subject to a four-month-and-one-day statutory hold period. In addition, all securities issued to Minera Alamos are subject to further resale restrictions which require Minera Alamos to notify Prime Mining Corp. in advance of the disposition of any securities of Prime Mining Corp.