Galane Gold Ltd. has entered into a letter of intent (LOI) for the acquisition of all of the outstanding shares of Vantage Goldfields Limited, a gold mining company with operations in the Mpumalanga Province of South Africa.
The company said the letter establishes the terms of the acquisition as between the parties and is expected to be followed by the execution of a binding acquisition agreement setting forth the detailed terms of the acquisition and containing conditions customary in transactions of this nature including completion of satisfactory legal and technical due diligence, delivery by Vantage of a 43-101 technical report and receipt of all other necessary regulatory or third party approvals including the approval of the TSX Venture Exchange and approval of the Business Rescue Practitioner according to applicable legislation in South Africa.
The final structure of the Acquisition will be determined by Galane and Vantage to accommodate various legal, tax and accounting considerations. The LOI is not binding (other than certain provisions including exclusivity obligations) and may be terminated by, among other things, mutual consent or if the Acquisition Agreement and related transaction documents have not been entered into by June 16, 2017.
Further details regarding the Acquisition including the consideration to be paid for the outstanding Vantage shares shall be provided in connection with the announcement of the signing of the acquisition agreement.
“This represents another significant step towards Galane’s stated goal to reshape the Company into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles. The Vantage mines are located within 30 kilometres of our existing operations at Galaxy Gold and obvious synergies exist between the two operations,” CEO Nick Brodie said.
“We hope to leverage these synergies to create an operating asset in the Barberton area which, together with the Company’s Galaxy property, is expected to result in a combined resource exceeding 5,800,000 ounces, production of over 160,000 ounces per annum and an all in sustaining cost of less than US$900 per ounce.”
Vantage is an Australian company with mining assets located on the Barberton Greenstone Belt (“BGB”), proximate to the town of Barberton in the Mpumalanga Province of South Africa and includes several historical mining operations on the BGB as well as prospecting rights covering an area of approximately 160 km2 .
Vantage’s Barbrook Mine and Lily Mine suspended operations in 2016 due to financial difficulties and were placed in Business Rescue, a form of creditor protection pursuant to the laws of South Africa. A plan has been agreed with Vantage management and the Business Rescue Practitioner that would see operations recommence within 90 days of the completion of the acquisition.