Newrange Gold Corp (CVE:NRG) (OTCMKTS:NRGOF) said Monday that to further monetize its Colombian exploration assets, it has struck a deal with GoldMining Inc (CVE:GOLD) to sell its 100% interest in the Yarumalito gold project in central Colombia.
"We are pleased to have reached this agreement with GoldMining as a first step in monetizing our Colombian assets," said Newrange Gold Corp CEO Robert Archer in a statement.
Archer said the sale paved the way for the Vancouver-based company to conclude the sale of Newrange's subsidiary and remaining projects in Colombia.
On June 5, Newrange first said it was selling its Colombian assets to Australia’s Andean Mining Corporation Pty Ltd in a US$1 million deal.
Newrange’s Colombian portfolio consists of its wholly-owned subsidiary, Corporacion Minera de Colombia, which owns the El Dovio and Anori exploration projects.
The junior explorer said in a statement that the sale would allow Newrange to focus on its highly prospective Pamlico project in Nevada, which includes the historic Pamlico group of mines as well as the Good Hope, Gold Bar and Sunset mines nearby.
Funding for flagship Pamlico Project
“The combined proceeds from both transactions will provide significant non-dilutive funds for exploration on the company's flagship Pamlico Project in Nevada," said Archer.
According to the agreement, a wholly-owned subsidiary of GoldMining will acquire the Yarumalito Project and related assets from a wholly-owned subsidiary of Newrange Gold. GoldMining will pay Newrange $1.2 million in GoldMining shares. It will also fork over $200,000 in cash to Newrange, of which $25,000 has been advanced as a deposit.
Newrange said it will retain a 1% net smelter returns royalty, which can be purchased by GoldMining at any time before the completion of a feasibility study on the project for $1,000,000.
The GoldMining shares to be issued under the transaction are subject to a four-month and one-day hold period and additional resale restrictions in keeping with the terms of the agreement. The companies expect the deal to close by December 2.
In a statement, GoldMining CEO Garnet Dawson said the mid-Cauca belt of Colombia is one of the more underexplored gold-copper belts in the world.
“Yarumalito has seen significant exploration by Newrange and senior mining company partners, including 18,540 metres of drilling in 55 holes, metallurgical test work and historic small-scale underground development and production by the original owner,” said Dawson.
“Upon closing, we plan to commission an updated technical report for the project as well as identify opportunities for follow-up exploration,” he added.
At Pamlico, in Nevada, Newrange is continuing with the underground surveying, mapping and sampling program on the more than 8,000 metres of historic mine workings in the Pamlico Ridge area.
Contact Uttara Choudhury at [email protected]
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