20:09:59 EDT Fri 19 Apr 2024
Enter Symbol
or Name
USA
CA



TomaGold Corp
Symbol LOT
Shares Issued 139,606,201
Close 2018-01-26 C$ 0.07
Market Cap C$ 9,772,434
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TomaGold forms subsidiary for gold brokerage

2018-01-29 09:45 ET - News Release

Mr. David Grondin reports

TOMAGOLD DIVERSIFIES INTO GOLD BROKERAGE

TomaGold Corp. has created a new subsidiary, TomaSouth Corp., specialized in gold brokerage. More specifically, TomaSouth's activities will consist of buying gold from artisanal producers and transporting it to refineries.

Start of TomaSouth's activities

TomaSouth closed its first transaction, for 340 ounces of gold, in the second quarter. As part of that transaction, the corporation entered into a partnership with local entities that will oversee day-to-day operations. The expertise of those local partners and their access to an extensive network of South American gold producers are key to the expansion of the corporation's brokerage activities.

The corporation has established a revenue-sharing plan for the partnership under which it will receive cash consideration of 50 per cent to 85 per cent of the monthly earnings based on the volume of transactions. In addition, it paid its local partners an initial $50,000 and will make a final payment of $50,000 on closing of the second transaction. The corporation will also grant a total of two million consultant options that are exercisable when certain performance targets are reached as follows: once the corporation has received the proceeds for a total of 50 kilograms of gold traded in accordance with the consulting agreement, the holder may exercise its rights for one-quarter of the options granted; once the corporation has received the proceeds for a total of 100 kilograms of gold traded in accordance with the consultation agreement, the holder may exercise its rights for a second quarter of the options granted; and once the corporation has received the proceeds for a total of 250 kilograms of gold traded in accordance with the consultation agreement, the holder may exercise its rights for the remaining half of the options granted.

Line of credit

To finance its new activities, the corporation has obtained a $1-million line of credit from investors in Quebec. The credit facility bears interest at an annual rate of 11.95 per cent on any used balance and is renewable every two years. The corporation will also issue a total of 850,000 bonus shares of its capital stock to the investors in two annual tranches of 425,000 shares priced at nine cents per share. The closing of the line of credit is expected to occur in the next 30 days.

"This new gold brokerage business will have significant benefits for TomaGold as it will enable us to generate positive cash flow for our exploration activities without creating excessive dilution," said David Grondin, president and chief executive officer of TomaGold. "We will continue to expand our network in South America over the coming weeks by building solid relationships with local producers. With the help of our partners, we'll have access to a vast network of gold producers of all sizes. Along with our new credit facility, this initiative will enable us to increase the number and volume of our transactions and generate growing revenues for the corporation."

The common shares to be issued under the credit facility are subject to a minimum four-month hold period. The financing is subject to the approval of the TSX Venture Exchange.

About TomaGold Corp.

TomaGold is a Canadian mineral exploration company engaged in the acquisition, assessment, exploration and development of gold mineral properties. To optimize its chances of discovery and minimize its exploration risk, TomaGold aims to develop high-grade gold properties with major mining companies. It currently has joint venture agreements with Iamgold Corp. for the Monster Lake project, with Goldcorp Inc. for the Sidace Lake property, and with Goldcorp Inc. and New Gold Inc. for the Baird property.

The corporation is also engaged in gold brokerage activities in South America through its subsidiary, TomaSouth.

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