Caldas Gold (TSXV: CGC) has completed its previously announced C$85.0 million private placement, with the funds currently sitting in escrow pending the satisfaction of several release conditions. With the completion of the financing, the company can now turn its focus to meeting several conditions to complete its transformation to that of Aris Gold Corp.
Release conditions for the funds that are currently in escrow essentially amount to the company extending its mining contribution and concession contract for the firms flagship property for a period of 20 years, as well as conducting a reorganization of the company. The firms board of directors will be required to change to those proposed in the firms November 23, 2020, release, while the company must also change its name to Aris Gold Corp. Finally, the investor agreement with Gran Colombia Gold (TSXV: GCM) must remain in effect.
As per the escrow agreement, the changes must be in effect before March 31, however current management has stated that it expects conditions to be met by mid-January. Once released, funds from the financing are to be used for working capital and the modernization and expansion of the Caldas Gold mining operations in Colombia.
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The $85 million financing notably saw the participation of Gran Colombia, whom prior to the transaction owned a 53.5% stake in the company. Despite placing a further C$17.0 million into the company in the latest round, its ownership of the company will drop to 44.3% on an undiluted basis. As part of the escrow release conditions, Gran Colombia must maintain at least 20% ownership of the company.
“Completing this equity financing is our first exciting milestone toward building Aris Gold into an Americas-focused precious metals producer. We are working closely with the Caldas Gold team on plans for advancing the Caldas mine expansion project, which includes the development of the Deeps Zone mineralization and construction of a new 4,000 tpd processing facility to significantly increase gold production rates. We are also collaborating on workforce training initiatives and implementation of an industry-leading sustainability program. We expect to facilitate a seamless Board and management transition by early 2021.”
Neil Woodyer, CEO of Aris Gold
Caldas Gold last traded at $2.40 on the TSX Venture.
Information for this briefing was found via Sedar and Caldas Gold. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
