a) the creation and sale of a 1.0% net smelter return ("NSR") royalty on production from the Corcoesto Gold Project and the sale of Edgewater's right to purchase 1.0% of the existing 1.5% NSR (see news release July 28, 2010) for total cash proceeds of US$4,000,000. As part of the agreement, the previous owner retained a 1.5% NSR on the Corcoesto Gold Project and granted Edgewater the right to buy back 1.0% of the 1.5% NSR; and
c)a non-brokered private placement consisting of 2,436,250 units at a price of C$0.40 per unit and an exchange rate of CAD$:US$ = 1.026 for gross proceeds of US$1,000,000. Each unit will consist of one common share and one common share purchase warrant. Each warrant will allow the holder to purchase one common share in Edgewater for a period of 12 months from closing at a price of C$0.50 per share.
President and CEO George Salamis stated, "We are very pleased to announce this Transaction, which we view as an endorsement of the Corcoesto Gold Project. The royalty sale will allow Edgewater to minimize shareholder dilution while providing additional capital to advance the Corcoesto Gold Project through permitting and final feasibility."
On completion of the Transaction Edgewater's 100% owned Corcoesto Gold Project will be subject to a total NSR royalty on production of 2.5% and the Company will have a working capital position of $6.0 million.
A 6.0% finder's fee payable in cash or common shares of the Company will be paid on the total Transaction.
Completion of the Transaction is subject to approval of the TSX Venture Exchange and other conditions typical to a Transaction of this nature. Closing of the Transaction is expected to occur on or about September 26, 2012.