Court declines to approve Core Gold-Titan merger

Core Gold's Portovelo CIP processing plant in Ecuador. Source: Core Gold Inc.

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Core Gold Inc. [CGLD-TSVV; CGLDF-OTCQX] has released an update on a proposed merger transaction with Titan Minerals Ltd. [TTM-ASX], saying the British Columbia Supreme Court has declined to approve the transaction.

In a press release that was issued just prior to the close of trading on Thursday July 4, 2019, Core said the court concluded that the company failed to satisfy its burden of proof in establishing that the transaction was fair and reasonable.

Core said it is considering its options, including launching an appeal.

Meanwhile, Titan Mineral said it has requested that trading in its securities be suspended from the commencement of trading Friday (July 5, 2019). Titan said it made the request pending the release of an announcement following the receipt of legal advice in respect to Core Gold’s options in respect to the decision of the B.C. Supreme Court and the outcome of discussions with Core.

“It is expected that the suspension will last until Friday, July 19, 2019, or the company releasing the announcement, whichever occurs earlier,” Titan said in a press release on Friday.

Core shares reacted by tumbling 16% or $0.035 to 18.5 cents on volume of 623,500 on Friday. The shares are trading in a 52-week range of 19 cents and 34.5 cents.

Trading in Core Gold shares was halted at 2:59 p.m. on July 4, 2019, but permitted to resume just minutes after the close of trading on the same day.

Core Gold owns 100% of three mining production areas located in southern Ecuador. The company is currently focused on the Dynasty Goldfield Project, an open pit mine, which has a total NI 43-101-compliant resource of 2.2 million ounces of gold, the company has said. Core Gold began mining operations at Dynasty Goldfield within four months of assuming control of the company in September 2016.

Its portfolio also includes the Zaruma Gold Mine and Portovelo Mill Project.

Dynasty Goldfield is currently producing 750 tonnes per day of 3.2 g/t gold – material that is being processed at the Portovelo treatment plant.

Having produced more than 70,000 ounces of gold and 150,000 ounces of silver, the Zaruma gold mine is currently on stand-by.

The company also owns other significant gold exploration projects, including the Linderos and Copper Duke area in southern Ecuador, all of which are located on the main Peruvian Andean gold-copper belt, which extends into Ecuador.

Titan Minerals is a gold and copper explorer and owner and operator of a gold treatment business in southern Peru.

On February 24, 2019, Titan and Core issued a joint press release saying they had entered into a binding agreement that would result in Titan acquiring all of the issued and outstanding shares of Core Gold in a share exchange deal.

Under the agreement, each Core Gold shareholder was scheduled to receive 20 fully paid ordinary shares of Titan in pre-consolidation for each share of Core Gold.

Holders of Core Gold options and warrants were set to receive options in Titan on comparable terms.

Titan was set to remain the group parent company, in a move that would create an emerging ASX-listed Latin American-focused gold explorer, developer and producer with a large gold portfolio in Ecuador and Peru.

Titan as said the merger will create a diversified Latin American-focused, ASX-listed gold company with a robust portfolio of exploration, development and production assets in both the emerging mining jurisdictions of Ecuador and the well-established mining jurisdiction of Peru.

The portfolio includes a measured resource of 437,000 ounces of gold, an indicated resource of 585,000 ounces of gold and an inferred resource of 1.1 million ounces of gold at the Dynasty Goldfield Project in Ecuador.

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