Goldmining options Almaden project to Nevgold, Idaho

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Goldmining Inc. [GOLD-TSX; GLDG-NYSE American; BSR-FSE] entered into an option agreement with Nevgold Corp. [NBAU-TSXV; NAUFF-OTCQB] and its subsidiary, whereby Nevgold’s subsidiary may acquire a 100% interest in the company’s Almaden project, located in Idaho, United States.

The agreement provides for total cash and/or share consideration to the company from Nevgold of up to $16.5-million, which comprises initial consideration of $3-million, additional payments of $6-million to exercise the option and further contingent payments of up to $7.5-million tied to success-based project milestones.

On closing, Nevgold will issue 4,444,444 common shares of Nevgold to Goldmining, representing $3-million of value at a price equal to 67.5 cents per share, representing approximately 10.6% of the outstanding Nevgold shares. Goldmining will subscribe for an additional $1-million of Nevgold shares at 67.5 cents per share for 1,481,481 common shares on closing of the option agreement and commits to a further lead order in a future financing by Nevgold completed by November 30, 2022, in an amount to the lesser of $1.25-million and 40% of the total gross proceeds raised by Nevgold in the financing.

In order to exercise the option, Nevgold must make the following additional payments to Goldmining’s subsidiary in cash and/or Nevgold shares (based on a 30-day VWAP (volume-weighted average price)): January 1, 2023 – $1.5-million; July 1, 2023 – $1.5-million; and January 1, 2024: $3-million.

To exercise the option, Nevgold must also make qualifying expenditures on the project totalling $2.25-million as to $1.5-millionby June 1, 2023 and $750,000 by Deember 31, 2023. Upon satisfying the total $9-million in cash and/or share payments and completing $2.25-million in qualifying expenditures by January 1, 2024, Nevgold would own 100% of the project.

Additionally, Nevgold is required to make success-based contingent payments totalling up to $7.5-million to Goldmining, payable in cash or shares at the election of Nevgold as to $500,000 on completion of a positive preliminary economic assessment, $2.5-million on completion of a positive preliminary feasibility study and $4.5-million on completion of a positive feasibility study.

Alastair Still, CEO of Goldmining, commented: “In March, 2020, with gold near US$1,620 per ounce, we acquired the Almaden project for $1.15-million and, currently, Almaden represents only 3% of our current overall resource base. Today’s transaction with Nevgold for total consideration of $16.5-million represents a significant return for our shareholders and demonstrates the substantial value embedded in our large resource portfolio which was acquired for the most part when gold was less than US$1,350 per ounce and copper near $2 per pound. The structure of this deal with Nevgold presents a win-win, providing us with exposure to the future success and upside potential of the Almaden project and providing Nevgold with a new strategic investment. Furthermore, through our strategic investment and Nevgold share consideration, we have additional exposure to work conducted by Nevgold to advance its portfolio of assets in the region, including its active exploration drilling at Limousine Butte in Nevada.”


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