Terraco Gold completes US 19 million convertible debenture

Terraco Gold Corp. [TEN-TSXV] has closed the asset purchase and convertible debenture transaction with Solidus Resources LLC, a wholly owned subsidiary of Waterton Precious Metals Fund II Cayman LP. Terraco, whose business strategy is to be a royalty company rather than a “boots on the ground” mineral explorer, directly or indirectly, now holds 100% of the following core assets:

  • A 3% net smelter return (NSR) on a majority of the current resources of Spring Valley, Pershing County, Nevada (Schmidt claims);
  • A 1% NSR on an additional portion of Spring Valley;
  • A right of first refusal relating to a 1% NSR on certain lands within one-half mile of the Schmidt claims;
  • A 2% NSR on the Moonlight Project, Pershing County, Nevada;
  • The Almaden-Nutmeg Mountain gold project in western Idaho;
  • Approximately $3.8 million in cash.

Under the transaction, Waterton subscribed for a senior unsecured convertible debenture in the aggregate principal amount of US $12.03 million, in TGC Holdings Ltd., a wholly-owned subsidiary of the company. As noted in a May 16, 2016, press release, the debenture may be converted into common shares of Terraco and/or TGC Holdings. Any shares of Terraco issued on conversion of the debenture will be subject to a hold period expiring four months after the date of issuance of such shares.

“We are pleased to have worked closely with Waterton on the asset sale and strategic financing, totaling over US $19-million. Terraco now owns two royalties on Spring Valley, a Nevada-based gold development asset which Waterton acquired from Barrick Gold and Midway Gold in 2015,” stated Todd Hilditch, President and CEO of Terraco. “We believe that the Spring Valley royalties are great platform assets which will help launch additional royalty growth for our company.”

The Spring Valley Project hosts (as of September 2014) measured and indicated resources of 245.5 million tonnes averaging 0.55 g/t gold, for 4,370,000 oz gold. Inferred resources are 71.1 million tonnes averaging 0.47 g/t gold, for 1,070,000 oz gold. The earlier stage Moonlight Project is located adjacent to the north of Spring Valley.

The Almaden-Nutmeg Mountain gold project 12 miles east of Weiser, Idaho hosts (as of April 2014) measured resources of 9,807,000 tonnes averaging 0.758 g/t gold, for 239,000 oz gold. Indicated resources are 29,248,000 tonnes averaging 0.665 g/t gold, for 625,000 oz gold. Inferred resources are 4,781,000 tonnes averaging 0.548 g/t gold, for 84,000 oz gold.

Further details about the transaction can be obtained from Terraco’s May 16, 2016, press release available on the company’s website and on SEDAR.

Filed in: Investment, Off the Wire

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