TSX-V: MSR
TORONTO, April 13,
2023 /CNW/ - Minsud Resources Corp. (TSX-V:
MSR) ("Minsud" or the "Company") is pleased to
announce that, further to the Company's press release dated
November 4, 2019, South32 Aluminium
(Holdings) Pty Ltd. ("South32") a
wholly owned subsidiary of South32 Limited, has exercised its
earn-in right (the "Earn-In Right") to acquire
a 50.1% ownership interest in Minera
Sud Argentina S.A. ("MSA"),
Minsud's indirect Argentinian subsidiary that
holds and operates the flagship Chita Valley
Project.
In accordance with the terms of the earn-in agreement dated
November 1, 2019, as amended (the
"Earn-In Agreement") between South32 and Minsud, South32 had
the right to exercise its Earn-In Right upon advancing initial
capital contributions to MSA of no less than C$14 million (the "South32 Initial Capital
Contribution") for a period of four years in order to fund
MSA's exploration programs. South32 advanced the South32 Initial
Capital Contribution within a period of three years and has, in
accordance with the Earn-In Agreement, exercised its Earn-In Right
to acquire 50.1% of MSA.
Completion of South32's acquisition of 50.1% of the shares in
MSA ("Completion") shall take place on the earlier of: (i)
the completion of the Year 4 annual exploration program; and (ii)
February 14, 2024.
At the time of Completion, Minsud Argentina Inc. ("MAI"),
a wholly owned subsidiary of the Company, and South32 will enter
into a shareholders' agreement to govern the management and
operation of MSA which will include further exploration and, if
economically feasible, the development and exploitation of the
Chita Valley Project (the "Shareholders' Agreement"). Until
Completion, MAI shall continue to manage and operate MSA and,
therefore, the Chita Valley Project.
As part of the exercise of the Earn-In Right the parties to the
Earn-In Agreement have agreed to certain amendments to the Earn-In
Agreement and the Shareholders' Agreement, including:
- The exercise of the Earn-In Right by South32 is confirmed and
certain other optional earn-in rights in favour of South32 relating
to the funding of a prefeasibility study and a bankable feasibility
study are removed.
- MAI shall be entitled to elect, prior to Completion, whether
South32's acquisition of the 50.1% stake in MSA will be effected by
means of:
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(i) South32's
subscription for MSA shares in consideration for the South32
Initial Capital Contribution (the "Cash In Option");
or
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(ii) a combination of a
subscription for 10% of MSA shares combined with a sale of 40.1% of
MSA shares from MAI to South32 (the "Cash Out
Option").
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- Previously, the Earn-In Agreement provided that on exercise of
the Earn-In Right South32 would pay an amount of C$14 million to MAI (the "Transfer Price")
which is in addition to the South32 Initial Capital Contribution.
The amendments to the earn-In Agreement now provide that:
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(i) Whilst South32 has
already committed to fund C$9.1 million for the Year 4 exploration
program (of which C$2.6 million has already been
contributed) 49.9% of the C$9.1 million Year 4 exploration program
will now be funded by MAI by way of this amount being deducted from
the Transfer Price;
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(ii) If MAI opts for
the Cash Out Option, then South32 shall pay the balance of the
Transfer Price to MAI on Completion and for a period of
twenty-four (24) months from the date on which the
Shareholders' Agreement is signed, and provided that MAI reinvests
the balance of the Transfer Price in approved MSA programs and
budgets, then MAI's 49.9% share in MSA shall not be diluted; and
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(iii) If MAI opts for
the Cash In Option, then MAI will not be obliged to contribute any
amount to an approved program and budget until the aggregate of the
South32 Initial Capital Contribution and the amounts contributed
and funded by South32 in respect of MSA approved programs and
budgets following the South32 Initial Capital Contribution equals
C$42 million.
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Ramiro Massa, Minsud's President
& CEO, said: "During these past three years, Minsud has been
challenged to meet the high operating and exploration standards of
a global mining company. This challenge came together with our
biggest opportunity to explore our Chita Valley Project, and
fortunately we have been able to deliver high quality exploration
results, with a significant new discovery at the Chinchillones
target, while taking care of the environment and our community. We
are very proud and excited to advance this partnership with
South32. I want to congratulate our team, our board, and our
investors who have always believed in us and in the potential of
the Chita Valley Project".
About the Chita Valley Project,
San Juan Province:
The Chita Valley Project is a large exploration stage porphyry
system with classic alteration features, widespread porphyry style
Cu-Mo-Au and polymetallic Ag-Pb-Zn mineralization hosted by
Hydrothermal Phreatic Breccias and associated gold and
silver-bearing polymetallic veins of intermediate sulfide
composition that conformed an outcropping porphyry system at Chita
and a lithocap of a porphyry system at Chinchillones. San Juan
Province of Argentina has a robust
mining sector and recognizes the important economic benefits of
responsible development of its substantial Mineral Resource
endowment.
About Minsud Resources
Corp.
Minsud is a mineral exploration company focused on exploring its
flagship Chita Valley Cu-Mo- Au-Ag-Pb-Zn Project, in the Province
of San Juan, Argentina. The
Company also holds a 100% owned portfolio of selected early-stage
prospects, including 6,000 ha in Santa
Cruz Province, Argentina.
About South32
South32 is a globally diversified mining and metals company. The
company's purpose is to make a difference by developing natural
resources, improving people's lives now and for generations to
come. South32 is trusted by its owners and partners to realize the
potential of their resources. South32 produces commodities
including bauxite, alumina, aluminium, copper, silver, lead, zinc,
nickel, metallurgical coal and manganese from its operations in
Australia, Southern Africa and South America. With a focus on growing its
base metals exposure, South32 also has two development options in
North America and several
partnerships with junior explorers around the world.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION:
This news release includes certain information that may
constitute forward-looking information under applicable Canadian
securities laws. Forward-looking information includes, but is not
limited to, statements about strategic plans, spending commitments,
future operations, results of exploration, anticipated financial
results, future work programs, capital expenditures and objectives.
Forward-looking information is necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking information including, but not limited to:
fluctuations in the currency markets (such as the Canadian dollar,
Argentina peso, and the U.S.
dollar); changes in national and local government, legislation,
taxation, controls, regulations and political or economic
developments in Canada and
Argentina or other countries in
which the Company may carry on business in the future; operating or
technical difficulties in connection with exploration and
development activities; risks and hazards associated with the
business of mineral exploration and development (including
environmental hazards or industrial accidents); risks relating to
the credit worthiness or financial condition of suppliers and other
parties with whom the Company does business; presence of laws and
regulations that may impose restrictions on mining, including those
currently enacted in Argentina;
employee relations; relationships with and claims by local
communities; availability and increasing costs associated with
operational inputs and labour; the speculative nature of mineral
exploration and development, including the risks of obtaining
necessary licenses, permits and approvals from government
authorities; business opportunities that may be presented to, or
pursued by, the Company; challenges to, or difficulty in
maintaining, the Company's title to properties; risks relating to
the Company's ability to raise funds; and the factors identified
under "Risk Factors" in the Company's Filing Statement dated
April 27, 2011. There can be no
assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. All
forward-looking-information contained in this news release is given
as of the date hereof and is based upon the opinions and estimates
of management and information available to management as at the
date hereof. The Company disclaims any intention or obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
required by law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Minsud Resources Corp.