Avidian Gold Corp. (“
Avidian” or the
“
Company”) (TSX-V: AVG) is pleased to announce,
further to its press release of May 2, 2024, that it has closed the
sale of its 100% owned Alaskan subsidiary, Avidian Gold Alaska Inc.
(“
Avidian Alaska”) to Contango ORE, Inc.
(“
Contango”) (NYSE-A: CTGO) for initial
consideration of US$2.4 million (CDN$3.3 million) (the
“
Initial Consideration”), plus potential future
upside consideration of US$1.0 million, for total consideration of
up to US$3.4 million (CDN$4.7 million at current exchange rate of
US$1 = CDN$1.3858) (the “
Transaction”). The
Initial Consideration is comprised of (i) US$400,000 in cash (the
“
Cash Consideration”) and (ii) US$2,000,000 in
shares of Contango common stock (the (“
Equity
Consideration”).
Avidian Alaska owns and controls the Golden Zone
and Amanita NE gold properties and has an option agreement to
purchase 100% of the Amanita gold property. Golden Zone is a large,
prospective property in between Anchorage and Fairbanks near rail
and highway infrastructure. The Amanita and Amanita NE gold
properties border Kinross Gold Corporation’s Fort Knox operation
near Fairbanks.
Dino Titaro, Director and Chairman of
Avidian Gold states, “with this transaction now completed
the Company will commence shoring up its balance sheet and focus on
a value creation strategy for its 100% owned Jungo gold-copper
project in Nevada and continue ongoing evaluation of a number of
possible strategic opportunities/alternatives that could be
transformational for the Company”.
The Transaction was put before shareholders and
received an overwhelmingly approval of 98.38% of votes casted at
the Company’s annual general and special meeting of shareholders
held on July 4, 2024. The Transaction constituted a Reviewable
Disposition under Policy 5.3 – Acquisitions and Disposition of
Non-Cash Assets of the TSX Venture Exchange (the
“Exchange”) remains subject to the final approval
of the Exchange.
Due to a delay from the United States Internal
Revenue Service (the “IRS”) of issuing a
certificate (the “Certificate”) that Contango is
not required to withhold any amount as a result of the Transaction,
which Certificate remains unissued, the Company entered into a side
letter with Contango and Avidian Alaska pursuant to which the
parties agreed to amend the payment schedule of the Initial
Consideration and provide for an adjustment mechanism if the IRS
determines that any amount (the “Withholding
Amount”) should be withheld (the “Withholding
Determination”) pursuant to the Internal Revenue Code of
1986.
US$50,000 of the Cash Consideration has
previously been received by the Company as a deposit. In the event
the Withholding Amount is greater than nil, the remaining
US$350,000 portion of the Cash Consideration (the “Retained
Consideration”) shall be reduced by the Withholding
Amount. Assuming there is no Withholding Amount, US$150,000 of the
Retained Consideration shall be payable upon receipt of the
Withholding Determination and the remaining US$200,000 shall be
payable on or before February 6, 2025 (the “Deferred
Payment Date”). If the Withholding Determination is not
received by the Deferred Payment Date, such payment shall be
deferred until receipt of the Withholding Determination. For
certainty, if there is a Withholding Amount such amount shall be
deducted from the aggregate Retained Consideration.
As of the date hereof, the Company has received
US$1,750,000 of the US$2,000,000 Equity Consideration in the form
of 78,511 common shares in the capital stock of Contango at a
deemed price of US$22.29 per share, based on the 10-day VWAP ending
on the closing date of the Transaction. The remaining US$250,000 of
the Equity Consideration has been withheld by Contango and will be
issued to the Company upon receipt of the Withholding
Determination. In the event the Withholding Amount exceeds
$350,000, such amount in excess of $350,000 will be deducted from
the remaining US$250,000 of the Equity Consideration based on the
value of the Contango’s shares at the time the Withholding
Determination is received.
The Transaction is more fully described in the
Company’s press release of May 2, 2024 and in the Company’s
management information circular dated May 31, 2024, which are
available on the Company’s SEDAR+ profile at www.sedarplus.ca.
About Avidian Gold Corp.
Avidian brings a disciplined and veteran team of
project managers with a focus on advanced-stage gold exploration.
The Company currently holds a 100% interest in the Jungo
gold-copper property in Nevada and is evaluating other
transformational opportunities.
Avidian is a shareholder in High Tide Resources
(CSE: HTRC), which is focused on and committed to the development
of mineral projects critical to infrastructure development using
industry best practices combined with a strong social license from
local communities. Avidian Gold controls approximately 28% of High
Tide’s outstanding shares. High Tide owns a 100% interest in the
Labrador West Iron Project which hosts a NI 43-101 Inferred iron
resource of 654.9 Mt @ 28.84% Fe and is located adjacent to the
Iron Ore Company of Canada’s (“IOCC”) Carol Lake Mine in Labrador
City, NL operated by Rio Tinto PLC. This resource is exposed at
surface and was pit constrained for an open-pit mining scenario.
The Technical Report was filed on SEDAR on April 6, 2023 and was
authored by Ryan Kressall M.Sc., P. Geo, Matthew Herrington, M.Sc.,
P. Geo, Catharine Pelletier, P. Eng. and Jeffrey Cassoff P.
Eng. The Company also owns a 100% interest in the Lac
Pegma copper-nickel-cobalt deposit located 50 kilometres southeast
of Fermont, Quebec.
Further details on the Company and the Jungo
Property can be found on the Company’s website at
www.avidiangold.com.
For further information, please contact:
Steve RoebuckPresident & CEOMobile: (905) 741-5458Email:
sroebuck@avidiangold.com
or
Dino TitaroDirector, Chairman of the BoardMobile: (647) 283
7600Email: dtitaro@avidiangold.com
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Forward-looking information
This News Release includes certain
"forward-looking statements" which are not comprised of historical
facts. Forward-looking statements include estimates and statements
that describe the Company’s future plans, objectives or goals,
including words to the effect that the Company or management
expects a stated condition or result to occur. Forward-looking
statements may be identified by such terms as “believes”,
“anticipates”, “expects”, “estimates”, “may”, “could”, “would”,
“will”, “must” or “plan”. Since forward-looking statements are
based on assumptions and address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Although these statements are based on information currently
available to the Company, the Company provides no assurance that
actual results will meet management’s expectations. Risks,
uncertainties and other factors involved with forward-looking
information could cause actual events, results, performance,
prospects and opportunities to differ materially from those
expressed or implied by such forward-looking information. Forward
looking information in this news release includes, but is not
limited to, the Company’s receipt of all or any part of the Initial
Consideration which it has not yet received, the timing of the
Withholding Determination and the quantum of the Withholding
Amount, the Company’s potential receipt pursuant to the Transaction
of upside consideration of up to US$1.0 million, the Company’s
objectives, goals or future plans, statements, exploration results,
potential mineralization, the estimation of mineral resources,
exploration and mine development plans, timing of the commencement
of operations by the Company or any other company in which it has
an interest, the material or financial outcomes of any such
operations so commenced, any anticipated benefit to the Company or
its shareholders resulting from the Company’s shareholdings, and
estimates of market conditions. Factors that could cause actual
results to differ materially from such forward-looking information
include, but are not limited to: any failure of Contango to deliver
to the Company all or any part of any outstanding consideration
which is or may become due to the Company pursuant to the terms of
the Transaction, failure to identify mineral resources, failure to
convert estimated mineral resources to reserves, the inability to
complete a feasibility study which recommends a production
decision, the preliminary nature of metallurgical test results,
delays in obtaining or failures to obtain required governmental,
environmental or other project approvals, political risks,
inability to fulfill the duty to accommodate First Nations and
other indigenous peoples, uncertainties relating to the
availability and costs of financing needed in the future, changes
in equity markets, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of
projects, capital and operating costs varying significantly from
estimates and the other risks involved in the mineral exploration
and development industry, and those risks set out in the Company’s
public documents filed on SEDAR+. Although the Company believes
that the assumptions and factors used in preparing the
forward-looking information in this news release are reasonable,
undue reliance should not be placed on such information, which only
applies as of the date of this news release, and no assurance can
be given that such events will occur in the disclosed time frames
or at all. The Company disclaims any intention or obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, other than
as required by law.
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