Eldorado Gold Corporation (“Eldorado” or “the
Company”) is pleased to announce that it has entered into a
definitive agreement (the “Agreement”) with G Mining Ventures Corp.
(“GMIN”) to divest its Tocantinzinho Project (“TZ”) located in
Brazil (the “Transaction”).
Under the terms of the Agreement, Eldorado will
receive:
- Minimum upfront
consideration of US$50 million, comprised of a minimum US$20
million in cash and 19.9% of GMIN shares upon closing of the
Transaction.
- Deferred
consideration of US$60 million in cash to be paid subject to TZ
commencing commercial production, payable on the first anniversary
of commercial production (“Deferred Consideration”).
- GMIN has the
option to defer 50% of the Deferred Consideration at a cost of US$5
million, in which case US$30 million is payable upon the first
anniversary of the commencement of commercial production and US$35
million is payable upon the second anniversary of the commencement
of commercial production.
- Upon closing of
the Transaction, Eldorado and GMIN will enter into an investor
rights agreement (“Investor Rights Agreement”), which will grant
Eldorado certain rights for so long as it maintains 10% ownership
of GMIN common shares on an undiluted basis. The Investor Rights
Agreement will include a customary lockup period until the earlier
of (i) two years, and (ii) GMIN making a positive construction
decision on TZ, the right for Eldorado to participate in future
equity offerings by GMIN in order to maintain the greater of 19.9%
of GMIN’s share capital and Eldorado’s pro rata ownership interest
prior to the offering, and additional customary rights and
restrictions for a transaction of this nature.
“This transaction provides Eldorado with
immediate value for TZ, while also retaining meaningful exposure to
future value creation through our equity stake in GMIN,” said
George Burns, Eldorado’s President and Chief Executive Officer. “TZ
will be a cornerstone asset for GMIN, a team with a strong track
record of building mines on time and on budget. Together with our
local Brazilian team, we believe they are the right group to
responsibly advance the asset and we look forward to following and
supporting their success. On behalf of the management team and
Company, I would like to take this opportunity to thank Lincoln
Silva and his team in Brazil for all their contributions, hard work
and dedication to the Company. We wish them all the best moving
forward.”
The Transaction is subject to customary closing
conditions, including required regulatory approvals. The
Transaction is expected to close in the fourth quarter of 2021.
Trinity Advisors Corporation acted as financial advisors to
Eldorado, and Fasken acted as Eldorado’s legal counsel.
About Eldorado Gold
Eldorado is a gold and base metals producer with mining,
development and exploration operations in Turkey, Canada, Greece,
Romania, and Brazil. The Company has a highly skilled and dedicated
workforce, safe and responsible operations, a portfolio of
high-quality assets, and long-term partnerships with local
communities. Eldorado's common shares trade on the Toronto Stock
Exchange (TSX: ELD) and the New York Stock Exchange (NYSE:
EGO).
Contact
Investor Relations
Lisa Wilkinson, VP, Investor Relations604.757
2237 or 1.888.353.8166 lisa.wilkinson@eldoradogold.com
Cautionary Note about Forward-looking
Statements and Information
Certain of the statements made and information
provided in this press release are forward-looking statements or
information within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities laws. Often, these forward-looking statements and
forward-looking information can be identified by the use of words
such as "plans", "expects", "is expected", "budget", “continue”,
“projected”, "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "believes" or the negatives thereof or variations
of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved.
Forward-looking statements or information
contained in this release include, but are not limited to,
statements or information with respect to: completion of the
Transaction, including timing thereof; Receipt of any cash and GMIN
shares payable to Eldorado on closing of the Transaction, including
the amount of such cash and GMIN shares; TZ achieving commercial
production and receipt of any Deferred Consideration, ability to
GMIN to advance TZ and to build a mine, including cost and timing
thereof, and ability to meet the conditions to completing the
Transaction, including receipt of require regulatory approvals. .
Forward-looking statements and forward-looking information by their
nature are based on assumptions and involve known and unknown
risks, market uncertainties and other factors, which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements or information.
We have made certain assumptions about the
forward-looking statements and information, including assumptions
about: our ability to completion the Transaction, and the timing
thereof, ability to satisfy all conditions of closing, including
receipt of all required regulatory approvals, the ability of GMIN
to advance TZ, including to achieve commercial production, and the
timing thereof; the amount of the cash and GMIN shares comprising
the consideration paid at the closing of the Transaction; and the
price of the GMIN shares. how the world-wide economic and social
impact of COVID-19 is managed and the duration and extent of the
COVID-19 pandemic; timing and cost of construction and exploration;
the future price of gold and other commodities; the global
concentrate market; exchange rates; anticipated costs, expenses and
working capital requirements; the impact of acquisitions,
dispositions, suspensions or delays on our business; and the
ability to achieve our goals. In particular, except where otherwise
stated, we have assumed a continuation of existing business
operations on substantially the same basis as exists at the time of
this release.
Even though our management believes that the
assumptions made and the expectations represented by such
statements or information are reasonable, there can be no assurance
that the forward-looking statement or information will prove to be
accurate. Many assumptions may be difficult to predict and are
beyond our control.
Furthermore, should one or more of the risks,
uncertainties or other factors materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements or information.
These risks, uncertainties and other factors include, among others:
inability to complete the transaction, including the inability to
meet the conditions to closing the Transaction, including receipt
of required regulatory approvals, and the timing thereof; inability
of GMIN to advance TZ to commercial production; inability of GMIN
to pay the Deferred Consideration; global outbreaks of infectious
diseases, including COVID-19; timing and cost of construction, and
the associated benefits; recoveries of gold and other metals;
geopolitical and economic climate (global and local), risks related
to mineral tenure and permits; gold and other commodity price
volatility; information technology systems risks; continued
softening of the global concentrate market; risks regarding
potential and pending litigation and arbitration proceedings
relating to our business, properties and operations; expected
impact on reserves and the carrying value; the updating of the
reserve and resource models and life of mine plans; mining
operational and development risk; financing risks; foreign country
operational risks; risks of sovereign investment; regulatory risks
and liabilities including environmental regulatory restrictions and
liability; discrepancies between actual and estimated production;
mineral reserves and resources and metallurgical testing and
recoveries; additional funding requirements; currency fluctuations;
community and non-governmental organization actions; speculative
nature of gold exploration; dilution; share price volatility and
the price of our common shares; competition; loss of key employees;
and defective title to mineral claims or properties, as well as
those risk factors discussed in the sections titled
“Forward-Looking Statements” and "Risk factors in our business" in
the Company's most recent Annual Information Form & Form 40-F.
The reader is directed to carefully review the detailed risk
discussion in our most recent Annual Information Form filed on
SEDAR and EDGAR under our Company name, which discussion is
incorporated by reference in this release, for a fuller
understanding of the risks and uncertainties that affect the
Company’s business and operations.
The inclusion of forward-looking statements and
information is designed to help you understand management’s current
views of our near- and longer-term prospects, and it may not be
appropriate for other purposes.
There can be no assurance that forward-looking
statements or information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, you should not place
undue reliance on the forward-looking statements or information
contained herein. Except as required by law, we do not expect to
update forward-looking statements and information continually as
conditions change.
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