Ranchero Gold signs LOI to sell Santa Daniela licences to Alamos Gold, Mexico
Ranchero Gold Corp.’s [TSXV-RNCH] wholly owned subsidiary Minera y Metalurgia Paika SA de CV (Paika) has entered into a letter of intent dated December 22, 2023, with Minas de Oro Nacional SA de CV, a wholly owned subsidiary of Alamos Gold Inc. [TSX, NYSE-AGI], for the proposed sale of Paika’s interest in four mineral licences comprising an area of 5,390 hectares, which represents approximately 24% of the surface area of the company’s Santa Daniela mineral property located in Sonora, Mexico, in consideration for the cash payment of US$2.55-million and a conditional cash payment of US$2.5-million.
An initial tranche of the cash payment in the amount of US$658,000 was paid to Paika concurrently with the execution of the LOI to pay for outstanding fees and taxes on the licences. In the event that the disposition is not completed, Paika will be required to repay this amount to Minas de Oro. The remaining US$1,892,000 of the cash payment will be paid once the licences have been transferred to Minas de Oro. In the event that Minas de Oro declares a mineral reserve of, or mines, greater than 500,000 ounces of gold within the licences, Minas de Oro will pay Paika an additional US$2.5-million.
Closing of the proposed sale of the licences will be subject to a number of conditions precedent, including, without limitation, execution of a definitive agreement between the parties; receipt of all required regulatory, corporate and third party approvals, including TSX Venture Exchange approval, and compliance with all applicable regulatory requirements and conditions necessary to complete the transaction; approval of the shareholders of Ranchero to the sale of the licences; and such other mutual conditions precedent customary for a transaction such as this.
In connection with shareholder approval, the company has solicited voting support agreements from shareholders holding a total 44,483,247 shares, or 67.67 per cent of the outstanding shares of the company, confirming their intention to vote in favour of the disposition.
The company intends to relinquish its interest in the remaining portions of the Santa Daniela property in order to eliminate holding costs. Subject to the completion of the disposition, the company’s principal property will be its option interest in the Pinchi Lake nickel project, as announced by the company in its press release dated November 21, 2023.
Ranchero is a gold exploration and development company currently focused on its 100%-owned Santa Daniela project located in Sonora, Mexico. The Santa Daniela project consist of a large land package in excess of 22,200 hectares within Mexico’s Sierra Madre Occidental – a newly emerging gold belt. The Santa Daniela project is also near a number of major gold mining operations in the region. Maiz Azul is the company’s most advanced prospect where exploration efforts are under way.