10:37:32 EDT Mon 23 May 2022
Enter Symbol
or Name
USA
CA



Login ID:
Password:
Save
Gran Colombia Gold Corp (4)
Symbol GCM
Shares Issued 49,772,036
Close 2019-10-04 C$ 5.46
Recent Sedar Documents

Gran Colombia inks LOI to sell some Marmito assets

2019-10-07 07:29 ET - News Release

Mr. Mike Davies reports

GRAN COLOMBIA GOLD ANNOUNCES LETTER OF INTENT WITH BLUENOSE IN RESPECT OF MARMATO SPIN OFF

Further to the press release of dated Sept. 16, 2019, Gran Colombia Gold Corp. entered into a letter of intent on Oct. 4, 2019, with Bluenose Gold Corp. in respect of the proposed acquisition by Bluenose of certain mining assets at the company's Marmato project located in the department of Caldas, Colombia.

The mining assets principally comprise the existing producing underground gold mine, including the right to mine in the lower portion of the Echandia licence area, the existing 1,200-tonne-per-day processing plant and the area encompassing the Deeps mineralization, all located within the mining licence area referred to as Zona Baja. The existing underground mine at Marmato produced 24,951 ounces of gold in 2018 and is on track to produce between 24,000 and 26,000 ounces of gold in 2019. The mining assets have excellent infrastructure, being located by the Pan American Highway with access to Medellin to the north and Manizales to the south, and have access to the national electricity grid which runs near the property. Gran Colombia is currently working with SRK Consulting (US) Inc. to complete a technical report for the mining assets pursuant to National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. The technical report, expected to be completed by the end of November and filed on SEDAR and the company's website, will include an updated mineral resource estimate for the mining assets. Gran Colombia will retain its existing ownership of the mining licences in the areas known as Zona Alta and Echandia. Gran Colombia and Bluenose are not related parties.

About Bluenose

Bluenose is primarily engaged in the acquisition and exploration of resource properties and is a reporting issuer in British Columbia and Alberta listed on the NEX board of the TSX Venture Exchange. It is anticipated that the proposed transaction will constitute a reverse takeover (as such term is defined under TSX-V Policy 5.2 -- Changes of Business and Reverse Takeovers) of Bluenose. The authorized share capital of Bluenose consists of an unlimited number of common shares and an unlimited number of preferred shares, issuable in series. As at the date hereof, an aggregate of 106,028,802 Bluenose common shares on a preconsolidation (as hereinafter defined) basis and no preferred shares are issued and outstanding. An aggregate of 5.8 million Bluenose common shares, on a preconsolidation basis, are reserved for issuance under incentive stock options granted to directors, officers and consultants of Bluenose.

Prior to the completion of the transaction, Bluenose will consolidate its outstanding common shares on a 1:10 basis.

Terms of the transaction

It is currently anticipated that Bluenose will acquire the mining assets by way of purchase from Gran Colombia of all of the issued and outstanding shares of Gran Colombia's wholly owned subsidiary, Medoro Resources Colombia Inc. Marmato Panama holds all of the issued and outstanding shares of Gran Colombia Gold Marmato SAS, which, in turn, holds all of the mining assets. The mining assets will be acquired by Bluenose for $57.5-million, which will be satisfied by the issuance by Bluenose to Gran Colombia of an aggregate of 28.75 million Bluenose common shares (on a postconsolidation basis) having a deemed price of $2 per postconsolidation Bluenose common share.

Prior to, or concurrent with, the completion of the transaction: (i) Gran Colombia will purchase from Bluenose, on a private placement basis, 2.5 million units of Bluenose, at a price of $2 per unit, for aggregate gross proceeds to Bluenose of $5-million; and Bluenose anticipates that it will complete a brokered private placement of a minimum of five million units and a maximum of 7.5 million units, at a price of $2 per unit, for aggregate gross proceeds to Bluenose of between $10-million and $15-million. No agent has yet been engaged with respect to the brokered private placement.

The units to be issued pursuant to the private placement and brokered private placement, respectively, will each comprise one Bluenose postconsolidation common share and one share purchase warrant, with each warrant being exercisable to acquire one additional Bluenose postconsolidation common share at a price of $3 for a period of five years from the closing of the private placement or brokered private placement, as applicable.

Pursuant to an agreement between Fiore Management & Advisory Corp. and Bluenose, Fiore shall be entitled to 100,000 Bluenose postconsolidation common shares upon the completion of the transaction.

The attached table outlines the anticipated share capital of Bluenose on a postconsolidation basis following the completion of the private placement, brokered private placement and transaction.


                                                                             Number of                        Number of
                                                       Bluenose common shares (minimum           Bluenose common shares
                                                            brokered private placement)      brokered private placement)


Outstanding Bluenose common shares (pretransaction)                         10,602,880                       10,602,880
Bluenose common shares issuable to Gran Colombia 
pursuant to transaction                                                     28,750,000                       28,750,000
Bluenose common shares issuable to Gran Colombia 
pursuant to private placement                                                2,500,000                        2,500,000
Bluenose common shares issuable pursuant to brokered 
private placement                                                            5,000,000                        7,500,000
Bluenose common Shares issuable to Fiore                                       100,000                          100,000
Total issued and outstanding                                                46,952,880                       49,452,880
Bluenose common shares reserved for issuance under 
Bluenose options                                                               580,000                          580,000
Bluenose common shares underlying warrants issuable to 
Gran Colombia pursuant to private placement                                  2,500,000                        2,500,000
Bluenose common shares underlying warrants issuable 
pursuant to brokered private placement                                       5,000,000                        7,500,000
Total issued and outstanding
Fully diluted                                                               55,032,880                       60,032,880

The company and Bluenose intend to negotiate and enter into a definitive agreement setting forth the detailed terms and conditions of the transaction. The closing of the transaction is subject to the receipt of all necessary regulatory and third party consents, authorizations and approvals, including, without limitation, the approval of the listing of the Bluenose common shares issued in connection with the transaction on the TSX-V which will be subject to Bluenose satisfying the TSX-V's minimum listing conditions for a mining issuer.

The closing of the transaction will also be subject to the following conditions, amongst others:

  • Gran Colombia and Bluenose being satisfied with the results of their respective due diligence investigations;
  • All liens and encumbrances in respect of Marmato Panama, Marmato Colombia and the mining assets granted in favour of the holders of the 8.25 per cent senior secured notes due in 2024 shall have been released and discharged, on terms and conditions satisfactory to Bluenose, acting reasonably;
  • To the extent required, the receipt of shareholder approval from the shareholders of Bluenose;
  • The consolidation shall have been completed;
  • The private placement and the brokered private placement shall have been completed;
  • The name of Bluenose shall have been changed to Caldas Gold Corp. or such other name as may be specified by Gran Colombia in writing;
  • No adverse change shall have occurred in the business, results of operations, assets, liabilities, financial condition or affairs of Bluenose, Marmato Panama or Marmato Colombia, taken as a whole, or the mining assets;
  • The final structure and steps for the transaction shall be satisfactory to both Bluenose and the company, acting reasonably, from a tax, corporate and securities law and due diligence perspective.

About the resulting issuer

Pursuant to the LOI, the initial members of the board of directors of Bluenose following the completion of the transaction shall be selected by Gran Colombia and set forth in the definitive agreement. If a meeting of the shareholders of Bluenose is required for the purposes of obtaining Bluenose shareholder approval, the members of the resulting issuer board will be nominated and elected by the shareholders of Bluenose at the Bluenose shareholder meeting (subject to, and contingent upon, the completion of the transaction). The current directors and officers of Bluenose shall resign at or prior to the completion of the transaction.

The resulting issuer board will be fixed at five directors as at the completion of the transaction, or as soon as practicable thereafter. Pursuant to the LOI, Gran Colombia shall be provided a continuing right to nominate a minimum of: (i) two directors to the resulting issuer board, so long as it holds greater than 20 per cent of the outstanding Bluenose common shares, or (ii) one director to the resulting issuer board, so long as it holds greater than 10 per cent of the outstanding Bluenose common shares.

The proposed resulting issuer board is expected to include the following members and Gran Colombia intends to appoint the following individuals as officers of the resulting entity upon completion of the transaction; the two additional nominees to the resulting issuer board are being recruited and will be disclosed when nominated.

Serafino Iacono, Panama City, Panama; interim chief executive officer and director

  • Executive co-chairman of the board to the company since Aug. 20, 2010;
  • Co-chairman of the board of Pacific Exploration & Production Corp. from Jan. 23, 2008, to Nov. 2, 2016;
  • Interim chief executive officer and president of Medoro Resources Ltd. from September, 2010, to June 10, 2011.

Michael Davies, Ontario, Canada; chief financial officer

Chief financial officer of the company since Aug. 20, 2010. Mr. Davies is a chartered accountant (Ontario) and has a bachelor of commerce degree from the University of Toronto. Over the last more than 20 years he has gained extensive international and public company experience in financial management, strategic planning and external reporting. Mr. Davies was the chief financial officer of PetroMagdalena Energy Corp. from July 13, 2009, to July 27, 2012. His diverse background also includes senior finance roles with several public companies, including LAC Minerals, IMAX Corp., Century II Holdings, Energentia Resources, Pamour Inc. and Giant Yellowknife Mines.

Lombardo Paredes Arenas; Medellin, Colombia; director

Mr. Paredes has been the chief executive officer of the company since Feb. 1, 2014. Prior to joining the company, he worked as an independent consultant from 2005 until January, 2014. Mr. Paredes also held a number of positions at Petroleos de Venezuela and its affiliates from 1975 to 1998.

Hernan Juan Jose Martinez Torres; Barranquilla, Colombia; director

Mr. Martinez has been the executive chairman and a director of Caribbean Resources Corp. since Sept. 4, 2012. Mr. Martinez served as minister of mines (Colombia) from July, 2006, to August, 2010, president of Atunec SA from August, 2002, to July, 2006, and held a number of positions at Exxon Mobil Colombia SA from 1964 to 2002.

Upon completion of the transaction, the resulting issuer will continue to operate within mining and natural resources industry.

About Gran Colombia Gold Corp.

Gran Colombia is a Canadian-based mid-tier gold producer with its primary focus in Colombia where it is currently the largest underground gold and silver producer with several mines in operation at its Segovia and Marmato operations. Gran Colombia is continuing to focus on exploration, expansion and modernization activities at its high-grade Segovia operations and, through the transaction described in this press release, progressing toward a major expansion and modernization of its underground mining operations at the Marmato project.

We seek Safe Harbor.

© 2022 Canjex Publishing Ltd. All rights reserved.