Road Town, British Virgin Islands and Vancouver, British Columbia--(Newsfile Corp. - February 10, 2020) - Aura Minerals Inc. (TSX: ORA) ("Aura") and Para Resources Inc. (TSXV: PBR) (WKN: A14YF1) (OTC: PRSRF) ("Para") announce that they have entered into a binding term sheet (the "Term Sheet") along with PPG Arizona Holdings LP ("PPG"), an affiliate of Pandion Mine Finance, LP, pursuant to which Aura will purchase from Para all of the issued and outstanding shares of its wholly-owned subsidiary Z79 Gold (USA) Corp. ("Z79") for nominal cash consideration of US$1 and the assumption by Aura of liabilities owing from Para to PPG under the Restructured PPF (as defined below) of approximately US$35 million, subject to the Buy Out Option (as defined below) (the "Share Purchase").
Z79 owns (i) a 94% interest in Gold Road Mining Corp. ("GRMC"), which in turn owns the Gold Road Mine located in Arizona (the "Gold Road Project") and (ii) a 94% interest in TR-UE Vein Exploration, Inc. ("TR-UE Vein"), which in turn owns various options to acquire parcels of land adjacent to the Gold Road Project.
Prior to or concurrent with the Share Purchase, the Term Sheet contemplates that:
- the parties will enter into an amendment to the pre-paid forward gold purchase agreement dated August 3, 2018 among Para, Z79, GRMC and PPG pursuant to which, among other things, Para's outstanding obligations thereunder shall be restructured and assigned to Aura (the "Restructured PPF"). Pursuant to the Restructured PPF, Aura will have the option (the "Buy Out Option") to satisfy in full all obligations owing under the Restructured PPF for US$24 million payable on or prior to the end of 12 months from closing of the Share Purchase;
- PPG will advance up to US$2 million to Para for Para to repay the balance of various accounts payable owing in connection with the Gold Road Project; and
- Aura will enter into a subscription agreement with Z79 pursuant to which Aura will advance US$8 million in two equal tranches, with the first advance occurring on closing of the Share Purchase and second one month after closing, and such amounts will be used for the development and restart of the Gold Road Project.
(collectively with the Share Purchase, the "Transactions").
Upon completion of the Transactions, it is expected that Aura will own 100% of each of GRMC and TR-UE Vein.
The closing of the Transactions is expected to occur on or about March 13, 2020.
Completion of the Transactions is subject to, among other things, (i) the parties reaching agreement on definitive documentation, (ii) Para receiving any required shareholder approval and approval of the TSX Venture Exchange and (iii) satisfactory completion by Aura of due diligence.
In connection with entering into of the Term Sheet, shareholders of Para holding over 50% of all of Para's issued and outstanding shares have agreed to vote in favour of the Transactions pursuant to any shareholder approval requirements triggered by the Transactions under applicable law.
Mr. Rodrigo Barbosa, President and CEO of Aura, said today "We believe that Gold Road has a good strategic fit with Aura's portfolio. With our technical and managerial expertise we should be able to help Gold Road unlock value and grow."
Mr. Geoff Hampson, Chairman and CEO of Para, said today "This transaction, if concluded, ends Para's involvement with the Gold Road Mine. Management and the Board of Directors have concluded that selling the shares of Z79 in return for a release by PPG of all of Para's obligations under the PPF is in the best interests of Para Resources Inc. and our shareholders."
This press release contains "forward-looking information" and "forward-looking statements", as defined in applicable securities laws (collectively, "forward-looking statements") which include, but are not limited to, statements with respect to the activities, events or developments that Aura and Para expect or anticipate will or may occur in the future.
Known and unknown risks, uncertainties and other factors, many of which are beyond the ability of Aura and Para to predict or control, could cause actual results to differ materially from those contained in the forward-looking statements. Specific reference is made to Aura's most recent Annual Information Form on file with certain Canadian provincial securities regulatory authorities and Para's most recent Management's Discussion and Analysis on file with certain Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements.
All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. Neither Aura nor Para undertake any obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law. If either Aura or Para does update one or more forward-looking statements, no inference should be drawn that either will make additional updates with respect to those or other forward-looking statements.
About Aura 360° Mining
Aura is focused on mining in complete terms - thinking holistically about how its business impacts and benefits every one of its stakeholders: Aura's company, Aura's shareholders, Aura's employees, and the countries and communities Aura serves. Aura calls this 360° Mining.
Aura is a mid-tier gold and copper production company focused on the development and operation of gold and base metal projects in the Americas. Aura's producing assets include the San Andres gold mine in Honduras, the Ernesto/Pau-a -Pique gold mine in Brazil and the Aranzazu copper-gold-silver mine in Mexico. In addition, Aura has two additional gold projects in Brazil, Almas and Matupá, and one gold project in Colombia, Tolda Fria.
About Para Resources
Para is a junior gold mining and exploration company. Para owns projects that include existing or near-term mining and milling operations as well as highly prospective exploration targets. Para has acquired fully permitted mines and facilities with adjacent properties that have either been past producers or where there are an abundance of small artisanal miners, dramatically reducing the exploration risk.
Para is unique in that the Insiders have invested more than US $30 million of their own capital and own approximately 70% of the Para's equity.
For further information, please contact:
President & CEO
No securities regulatory authority has either approved or disapproved of the contents of this news release. This press release is for information purposes only.
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.
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