TORONTO, Canada – Aura Gold Inc. (“Aura Gold”) (TSX:ORA) is pleased to announce that it has entered into definitive purchase agreement terms to acquire the Arapiraca project, from Zoneplan Limited and Repalla (Holdings) Inc. The definitive terms of the acquisition, which is subject to definitive documentation, minority shareholder approval and regulatory approvals, are given below. Aura Gold has a high level of confidence in the project and technical due diligence has been satisfied. Aura Gold will now advance Arapiraca on an accelerated basis.
Definitive Terms for the Acquisition
As consideration for purchase of the Arapiraca assets, Aura Gold will issue 250 million shares of the corporation. An additional 70 million shares will be held in escrow and released pro-rata in two stages upon increasing the tonnage in all resource categories to 210 million tonnes – 50 million shares when the resource estimate reaches 190 million tonnes and 20 million shares when the resources estimate reaches 210 million tonnes. In any event, the 70 million escrowed shares will be released within 5 years from the closing of the transaction. The vendors have the right to participate in new equity financings and will be entitled to place a representative on Aura Gold’s Board of Directors. Aura Gold will pay Net Smelter Return royalties on future production to Zoneplan of 0.75% on copper, 1.0% on gold and 4.0 % on all other mineral production. Repalla (Holdings) Inc. is an entity related to a director of Aura Gold, although it does not hold a controlling interest in the Arapiraca Project.
Resulting Capitalization After Acquisition
It is proposed that Aura Gold’s capital stock, after consummation of this acquisition, will be consolidated on the basis of 1 new share for 7 old shares. After this acquisition and consolidation, Aura Gold’s capital structure will be approximately:
|Issued and outstanding:||
|Existing warrants, stock options and shares for properties:||
Commenting on the definitive terms the new President and CEO, Mr. Patrick Downey stated, “ I am very pleased to have agreed these definitive terms with the Vendor. These definitive terms allow the Company to accelerate the execution of the transaction and also simplify the share structure of Aura Gold. The company will have an advanced stage exploration copper/gold project with a potential iron ore product and significant exploration upside. This project is located in an area of excellent infrastructure, in a country that actively encourages mine development. This will allow the Company to accelerate the development of this project and also focus on the business plan to acquire producing assets within South America.”
Timeline to Closing
Aura Gold will begin the preparation and filing of a NI 43-101-compliant Resource Estimation. It is expected that shareholder and regulatory approvals for the transaction will be sought following the filing of the NI 43-101 in early June. Aura Gold anticipates holding a special shareholders meeting in July to obtain this support.
About Aura Gold Inc.
Aura Gold Inc. (TSX:ORA) is a Canadian exploration company focused on the discovery of gold deposits in Brazil. Aura Gold’s projects are the Cumaru, the Inaja Greenstone Belt and the North Carajas Claims, which total approximately 600,000 hectares in the Carajas Metallogenic Province of north-central Brazil. The Carajas region is host to a significant number of world-class deposits of iron ore, gold, copper, nickel, manganese and bauxite. Aura Gold will continue to expand its current land position and use the acquisition of a development stage project to drive future growth.
For further information, please visit the Aura Gold web site at www.auragoldinc.com, or contact:
President & CEO
Vice President, Corporate Development
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release includes certain “forward-looking statements”. All statements other than statements of historical fact included in this release, including without limitation, statements regarding potential mineralization and reserves, exploration results, future plans and objectives of Aura Gold, are forward-looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Aura Gold’s expectations are the risks detailed herein and from time to time in the filings made by Aura Gold with securities regulators.