Elcora Advanced Materials has entered into an agreement for the proposed acquisition of the Eldorado gold mine in South Africa’s Barberton Greenstone Belt, marking its entry into gold asset ownership.
The transaction involves the purchase of 100% of the Eldorado property, including the associated surface tailings stockpile, as outlined in a binding range of terms (BROT) with Elmaic Trading CC (the Vendor)
It will proceed via a share purchase transaction, with Elcora acquiring all shares of the Vendor following its conversion to a private company. The purchase price includes $2m (C$2.76m) in cash and 20 million common shares, pending approval from the TSX Venture (TSXV) Exchange and regulatory bodies in South Africa. Completion of the transaction depends on several conditions such as satisfactory due diligence, execution of a definitive agreement, and renewal or confirmation of relevant prospecting rights.
The agreement outlines a phased transfer of ownership, initially involving 50% of membership interests, conditioned upon final regulatory acceptance. The remaining 50% will follow, based on further obligations specified in the definitive agreement. Elcora Advanced Materials director, president and CEO Troy Grant said: “Phase 0 is designed to generate cash starting within an anticipated time frame following acquisition, partially funding the mine development life cycle and reducing the need for dilutive equity raises that are typical of early stage mining acquisitions. “The anticipated timeline and cash flow generation from phase 0 are subject to tailings characterisation, processing recoveries, operating costs and gold prices, none of which have been established at this stage. “We are moving quickly and deliberately to close this transaction and commence phase 0 operations.” Elcora has also committed to issuing shares in two phases.