Galane Gold is an unhedged gold producer and explorer with mining operations and exploration tenements in Botswana and South Africa while Vantage Goldfields is a gold mining company with operations in the Mpumalanga Province of South Africa.
The letter of intent (LOI) establishes the terms of the acquisition as between the parties and is expected to be followed by the execution of a binding acquisition agreement setting forth the detailed terms of the acquisition.
It will also contain conditions customary in transactions of this nature, including completion of satisfactory legal and technical due diligence, delivery by Vantage of a 43-101 technical report and receipt of all other necessary regulatory or third party approvals including the approval of the TSX Venture Exchange and approval of the business rescue practitioner according to applicable legislation in South Africa.
The final structure of the acquisition will be determined by Galane Gold and Vantage Goldfields to accommodate various legal, tax and accounting considerations.
The LOI is not binding and may be terminated by, among other things, mutual consent or if the acquisition agreement and related transaction documents have not been entered into by 16 June 2017.
Further details regarding the acquisition including the consideration to be paid for the outstanding Vantage Goldfields shares shall be provided in connection with the announcement of the signing of the acquisition agreement.
“This represents another significant step towards Galane Gold’s stated goal to reshape the company into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles,” says Galane Gold CEO, Nick Brodie.
“The Vantage Goldfield mines are located within 30 km of our existing operations at Galaxy Gold and obvious synergies exist between the two operations.
“We hope to leverage these synergies to create an operating asset in the Barberton area which, together with the company’s Galaxy property, is expected to result in a combined resource exceeding 5 800 000 oz, production of over 160 000 ozpa and an all in sustaining cost of less than US$900 per oz,” he concludes.