i-80 Gold Corp. (TSX: IAU) announced this morning its comprehensive plan to put up a mining complex in Nevada. The mining firm has entered into a definitive exchange agreement with Nevada Gold Mines.
The agreement will see the company acquire certain processing infrastructure, and the Lone Tree and Buffalo Mountain properties from Nevada Gold Mines, a joint venture of gold producers Barrick Gold Corporation and Newmont Corporation.
In exchange, i-80 Gold will give its 40% equity in the South Arturo property held by its subsidiary Goldcorp Dee, the assigned option to acquire the adjacent Rodeo Creek exploration property held by its subsidiary Au-Reka Gold, contingent $50 million based on production from the Lone Tree property, and substitute bonding arrangement related to the Lone Tree and Buffalo Mountain reclamation obligations.
The 50% ownership in the South Arturo mine will consolidate Nevada Gold Mines’ 100% equity on the property. On the other hand, the $50-million contingent is disbursed via $25.00 per recovered gold equivalent ounce identified in the feasibility study and $25.00 per ounce of produced gold in excess.
Related to the agreement, i-80 Gold will be conducting a private placement financing at $2.62 per share, in which Nevada Gold Mines committed to purchasing 9.9% non-diluted equity not exceeding $50 million. The offering is part of a larger non-brokered private placement of up to $90 million in proceeds at the same issue price.
The company also entered into a non-binding term sheet with Orion Mine Finance for a comprehensive $140 million financing package, with an accordion feature of up to an additional $100 million.
Completing its series of agreements pursuant to the planned Nevada mining complex, the mining firm entered into an acquisition agreement with Waterton Global Resource Management to purchase the Ruby Hill mine for up to $150 million on a three-year milestone payment basis.
According to the acquisition terms, i-80 Gold can elect to pay up to 50% of the milestone payments in company shares provided that it will not exceed 9.99% equity. The company also has an early payment option that may reduce the total acquisition cost to approximately $130 million.
The firm expects to close the acquisitions in the second half of 2021, subject to regulatory approvals and customary closing conditions.
i-80 Gold last traded at $2.70 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. 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.
