Mandalay Resources Corporation Announces Execution of the Option Agreement with Equus Mining to Acquire the Cerro Bayo Mine i...
October 08 2019 - 7:00AM
Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX:
MND, OTCQB: MNDJF) is pleased to announce that it has entered into
a binding Option Agreement with Equus Mining (“Equus”) regarding
the previously announced transaction whereby Equus has an option to
explore at the 29,495 hectare Cerro Bayo mine district in Region
XI, Southern Chile. The option will extend for a 36 month period
(“Option Period”) from the Commencement Date, defined as the date
that is the earlier of six months (which period may be further
extended three months on agreement by the Parties, acting
reasonably) from the Effective Date and the date when Equus
receives all required approvals and authorities to set up and drill
from at least 60 Platforms on the Property.
Equus can exercise its option to acquire all the
issued share capital of Compania Minera Cerro Bayo Ltda. (“CMCB”),
including its mining properties, resources and mine infrastructure
at Cerro Bayo as well as the 1,500 tpd processing plant, which is
currently on care and maintenance at any time during the Option
Period. If the option has not been exercised by the Review Date,
being 18 months after the Commencement Date, and the option
agreement has not been terminated, Equus will contribute US$50,000
per month towards care and maintenance expenses until the end of
the Option Period.
Should Equus exercise its option to acquire CMCB, consideration
to Mandalay consists of:
- the issue to Mandalay of 19% of Equus’ share capital; and
- a 2.25% net smelter royalty on production from the Cerro Bayo
mining claims once the mine has produced at least 50,000 ounces of
gold equivalent, subject to a re-purchase option in favour of
Equus.
In addition, Equus will assume 50% of the
approved site closure costs at Cerro Bayo, and will reimburse
Mandalay for any previously paid costs in this regard.
For Further Information:
Dominic DuffyPresident and Chief Executive
Officer
Edison NguyenManager, Analytics and Investor
Relations
Contact: 647.260.1566
About Mandalay Resources
Corporation:
Mandalay Resources is a Canadian-based natural
resource company with producing assets in Australia and Sweden, and
care and maintenance and development projects in Chile. The Company
is focused on growing production at its gold and antimony operation
in Australia, and gold production from its operation in Sweden to
generate near term cash flow.
About Equus Mining Limited:
Equus Mining Limited (ASX: EQE) is an Australian
Exploration and Development Company listed on the Australian
Securities Exchange. Equus is focused primarily on the exploration
and development of gold-silver-polymetallic projects in the
politically stable and supportive mining jurisdiction of XI Region,
Southern Chile. Equus’ projects are strategically located in the
northwestern portion of the highly prospective, world class Deseado
Massif precious metal district, near existing underutilized mine
and processing infrastructure.
Forward-Looking Statements:
This news release contains "forward-looking
statements" within the meaning of applicable securities laws,
including statements regarding the proposed sale of Cerro Bayo to
Equus Mining Limited. There is no assurance that the proposed
transaction will be completed on the terms set out in this press
release or at all. Actual results and developments may differ
materially from those contemplated by these statements depending
on, among other things, changes in commodity prices and general
market and economic conditions. The factors identified above are
not intended to represent a complete list of the factors that could
affect Mandalay. A description of additional risks that could
result in actual results and developments differing from those
contemplated by forward-looking statements in this news release can
be found under the heading “Risk Factors” in Mandalay’s annual
information form dated March 28, 2019, a copy of which is available
under Mandalay’s profile at www.sedar.com. In addition, there can
be no assurance that any inferred resources that are discovered as
a result of additional drilling will ever be upgraded to proven or
probable reserves. Although Mandalay has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements.
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