(All amounts are in US$ unless otherwise indicated.)
MONTREAL, March 19, 2019 (GLOBE NEWSWIRE) -- ALGOLD RESOURCES LTD. (TSXV: ALG – “Algold” or the “Corporation”) wishes to amend the existing disclosure regarding its funding arrangement with Wafa Mining & Petroleum SA (“Wafa”) announced on July 13, 2018 and October 9, 2018.
As previously announced, Wafa agreed to invest in Algold’s subsidiary, Société Tijirit Exploitation SA (“Tirex”), a total of $4,200,000. That investment was in the form of a non-demand interest-free advance (the “Advance”) reimbursable only when the Corporation’s Tijirit project generates revenues and would be reimbursed by paying to Wafa a 10% pro-rata share of the funds that might be available from Tirex’s future operating cash flows. Algold had previously announced that the funds owing in connection with the Advance constituted a private placement and asset purchase price.
In consideration of the value received from Wafa in connection with the Advance, Algold agreed to issue to Wafa, as bonus shares, 883,747 common shares of Algold (the “Shares”) and transfer to Wafa a 10% interest in Tirex (the “Tirex Interest”), upon full receipt. The fair value allocated to the Shares, based on the October 8, 2018 closing price of CDN$0.47, was CDN$415,361.
To date, Algold has received a total of $3,500,000 from Wafa and anticipates receiving the final payment of $700,000 in April 2019. The Shares have been issued, whereas the transfer of the Tirex Interest will be completed upon the receipt of the final payment of the Advance.
The Advance remains subject to the approval of the TSXV.
The Advance is being used to fund exploration work, for working capital and for general corporate purposes.
Algold also announces that it has entered into an agreement party with a service provider, which will maintain its drilling team and equipment on standby until the Corporation is ready to resume its exploration program. Under the agreement, Algold will pay a monthly fee of $26,000 in common shares at a price equal to their five-day volume-weighted average price as of the last day of each month. This agreement will remain in effect until one of the parties terminates it, which either may do after July 2019. Each issuance will be subject to the approval of the TSXV
Additionally, Teranga Gold (Australia) Pty Ltd (“Teranga”) has agreed to defer a payment of CDN$1,500,000 that would have been due if within 90 days of the Corporation achieving an NI 43 101 compliant mineral resource of 1,000,000 ounces at its Tijirit property. That payment has been deferred for a period of 12 months from the date on which it would otherwise be payable, subject to acceleration upon certain events such as a change of control or a financing in the amount of $20,000,000 or greater. This payment obligation was created under a transaction between the Corporation and Gryphon Minerals Limited (Teranga’s predecessor) announced on October 28, 2015.
Moreover, Algold announces the issuance, subject to final TSXV approval, of 277,711 common shares at a price of CDN $0.17 each in settlement of a debt in the amount of CDN $47,211.
Finally, Algold also announces that it has amended its Deferred Share Units Plan (the “DSU Plan”) to increase the number of shares reserved for issuance under the DSU Plan from 6,500,000 to 15,000,000, and to expand the scope of eligibility to the DSU Plan to include all directors, officers, employees and other persons who provide ongoing services to Algold and its affiliates. The amendments were previously approved by Algold shareholders at the annual shareholders meeting held on June 28, 2018.
Algold Resources Ltd. is focused on the exploration and development of gold deposits in West Africa. The board of directors and management team are seasoned resource industry professionals with extensive experience in the exploration and development of world-class gold projects in Africa.
Certain statements in this press release may be forward-looking. Such statements include those with respect to the receipt of the final $700,000 owing to Algold from Wafa in connection with the Advance. Although the Corporation believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Such assumptions, which may prove incorrect, include the following: (i) Wafa will proceed with the final payment in a timely fashion and (ii) no technical or other obstacles will prevent Algold from receiving Wafa’s payment when made. Factors that could cause actual results to differ materially from expectations include, but are not limited to: (i) Wafa’s inability or unwillingness to make the final payment, in whole or in part and (ii) the occurrence of a technical or other difficulty that prevents Algold from receiving the payment when made. A description of other risks affecting Algold's business and activities appears in Algold's 2017 annual management's discussion and analysis, which is available on SEDAR at www.sedar.com. No assurance can be given that any events anticipated by the forward-looking information in this press release will transpire or occur, or if any of them do so, what benefits that Algold will derive therefrom. In particular, no assurance can be given as to the future financial performance of Algold. Algold disclaims any intention or obligation to update or revise any forward-looking statements in order to account for any new information or any other event, except as required under applicable law. The reader is warned against undue reliance on these forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
Algold Resources Ltd.
1320, boul. Graham, bureau 132, Mont-Royal, Québec, H3P 3C8, www.algold.com
|Benoit LaSalle, FCPA, FCA||Alex Ball|
|Chairman and Chief Executive Officer||Executive VP, Finance and Corporate Development|
|+1 (514) 951-4411||+1 (647) 919 2227|