Pampa Metals Corp. (CSE: PM) this morning indicated that it has completed a previously announced option arrangement with that of Austral Gold Ltd. (TSXV: AGLD). Austral has been granted an option to acquire as much as an 80% joint venture interest in Pampa’s Morros Blanco and Cerro Blancos properties in Chile.
The transaction will see the cancellation of 2,963,132 Pampa shares, amounting to roughly 6% of the outstanding share capital of the firm, and certain cash payments. Austral will also be covering exploration expenditures at a minimum of $1.0 million in the first year, and $2.0 million in the second year.
On top of this, a bankable feasibility study is also being required of Austral in order for them to be granted an 80% interest in either of the properties. If the studies find that copper is the most prevalent resource (rather than gold and silver), Pampa could then earn back an 80% interest under the same provisions as Austral.
The cancellation of shares leaves Austral with a 13.6% stake in Pampa, which is a third of Austral’s shareholdings in the company. Based on the current number of shares, this reduces the total issued shares of Pampa Metals to 43,432,261.
Pampa Metals Corp. last traded on the CSE at $0.44, while Austral Gold Ltd. last traded on the TSX Venture at $0.12.
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.