Lago Dourado acquires 100% interest in its flagship Juruena gold project
Lago Dourado Minerals Ltd. (TSX VENTURE:LDM) (the "Company") announced today that it has signed an agreement with Geomin to acquire a 100% interest in the remaining 16 exploration licenses, previously under option, at its flagship gold project Juruena, in the Mato Grosso state of Brazil. The Company will now hold a 100% interest in the entire project which consists of 25 exploration licenses, covering approximately 70,000 hectares. There is currently one drill rig turning at Juruena with two rigs expected to be added in the coming weeks.
The terms of the agreement with Geomin, a local private consulting firm in Brazil, include; a cash payment of Cdn$1 million, the issuance of 1.5 million common shares and the issuance of 1 million warrants with a three-year term at an exercise price of equal to the lower of Cdn.$1.00 and the 10 day weighted average trading price of the common shares of the Company, from March 9, 2011, being Cdn$0.91, subject to receipt of requisite regulatory approval.
This agreement replaces the existing option agreement with Geomin under which Lago Dourado could earn a 70% interest in the Juruena Licences by making option payments totalling US$1.1 million by July 2013. The Company could then purchase Geomin's 30% interest in the joint venture company at any stage for US$8 million. Further, if Geomin diluted down to a 10% interest in the joint venture company it would then be obligated to exchange that interest for a 2% net smelter returns royalty, which Lago Dourado could purchase for a lump sum payment of US$3.0 million.
"We are very pleased that we were able to reach a mutually beneficial agreement that simplifies the existing ownership structure at Juruena, while at the same time offers Geomin, a key local player in the State of Mato Grosso, upside leverage on exploration success at Juruena," said Forbes Gemmell, Lago Dourado's President and Chief Executive Officer. The deal, which is subject to TSXV approval, is expected to close prior to April 15, 2011.
About the Company:
Lago Dourado Minerals Ltd. is a Canadian mineral exploration company focused on advancing its Juruena gold project in the state of Mato Grosso, Brazil. Extensive gold mineralization has been identified and at least 0.5 million oz of gold has been mined from surface workings over 10 square kilometres of the property, which remains largely untested. A phase I drill campaign is currently underway and is expected to continue throughout the spring of 2011. The Company currently has 60.6 million shares outstanding.
Image is from Lago Dourado Minerals.