GFGSF - GFG Signs Binding LOI with Patriot Gold to Sell its Rattlesnake Hills Gold Project | Benzinga
SASKATOON, Saskatchewan, May 09, 2024 (GLOBE NEWSWIRE) -- GFG Resources Inc. (TSXV:GFG) (OTCQB:GFGSF) ("GFG" or the "Company") announces the signing of a binding letter of intent (the "LOI") for the sale of its 100% owned Rattlesnake Hills Gold Project (the "Project") to Patriot Gold Vault Ltd., ("Patriot"). Under the terms of the LOI, which will be formalized by a definitive agreement between the parties within forty-five (45) days (the "Transaction"), Patriot will pay GFG an aggregate consideration of approximately C$3.3 million.
"We are excited to announce our agreement with Patriot for the sale of our Rattlesnake Hills Gold Project," stated Brian Skanderbeg, President and CEO of GFG. "The Patriot team's impressive track record gives us great confidence in their ability to drive the Project forward from both an exploration and development perspective. This deal enhances shareholder value through staged cash payments that strengthen our treasury while minimizing future dilution, as well as equity participation in Patriot that provides exposure to future successes. We will now advance with an undivided focus on our three large scale projects in the prolific Timmins Gold District."
"Patriot Gold Vault is proud to announce the agreement for the purchase of the Rattlesnake Hills Gold Project as our launch asset. Patriot was created to offer leverage to the next gold cycle by creating a liquid, public gold aggregator. Patriot will focus on acquiring resource-ready projects in Tier 1 jurisdictions and drilling them aggressively with the lens of a new gold price paradigm. Much like the Detour and Malartic gold mines, we believe that past producers and historical resources are often constrained by capital and lack of drilling not geology. Despite a robust gold price backdrop, pre-production gold inventories are trading at cycle low multiples, and this is our opportunity," stated Mario Vetro, Co-Founder of Patriot. "We thank the GFG team for their work on this transaction and diligent stewardship of the Project. We look forward to shortly updating the market with further acquisitions."
Transaction Terms
Patriot will acquire a 100% interest in the Project on the following terms:
- Cash payment of C$250,000 to GFG on signing of the binding LOI;
- Cash payment of C$250,000 to GFG upon the execution and delivery of a definitive agreement;
- On closing of the Transaction, Patriot will:
- Make a cash payment of C$1,200,000 to GFG; and
- Issue to GFG the greater of 3,000,000 common shares of Patriot (the "Consideration Shares") or $600,000 in value of Consideration Shares based on the volume weighted average trading price of the Consideration Shares for the 20 trading days immediately preceding the Closing Date, or in the event that Patriot is not listed, the value of the Consideration Shares shall be determined by the last financing price of the Patriot shares sold to arm's length investors to Patriot; and
- On the date that is 12 months following the Closing Date, Patriot will pay to GFG a cash payment of C$1,000,000.
Additional Terms
- On closing of the Transaction, Patriot will ...