TORONTO, Oct. 08, 2019 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) is pleased to announce that it has entered into a binding Option Agreement with Equus Mining (“Equus”) regarding the previously announced transaction whereby Equus has an option to explore at the 29,495 hectare Cerro Bayo mine district in Region XI, Southern Chile. The option will extend for a 36 month period (“Option Period”) from the Commencement Date, defined as the date that is the earlier of six months (which period may be further extended three months on agreement by the Parties, acting reasonably) from the Effective Date and the date when Equus receives all required approvals and authorities to set up and drill from at least 60 Platforms on the Property.
Equus can exercise its option to acquire all the issued share capital of Compania Minera Cerro Bayo Ltda. (“CMCB”), including its mining properties, resources and mine infrastructure at Cerro Bayo as well as the 1,500 tpd processing plant, which is currently on care and maintenance at any time during the Option Period. If the option has not been exercised by the Review Date, being 18 months after the Commencement Date, and the option agreement has not been terminated, Equus will contribute US$50,000 per month towards care and maintenance expenses until the end of the Option Period.
Should Equus exercise its option to acquire CMCB, consideration to Mandalay consists of:
- the issue to Mandalay of 19% of Equus’ share capital; and
- a 2.25% net smelter royalty on production from the Cerro Bayo mining claims once the mine has produced at least 50,000 ounces of gold equivalent, subject to a re-purchase option in favour of Equus.
In addition, Equus will assume 50% of the approved site closure costs at Cerro Bayo, and will reimburse Mandalay for any previously paid costs in this regard.
For Further Information:
President and Chief Executive Officer
Manager, Analytics and Investor Relations
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and Sweden, and care and maintenance and development projects in Chile. The Company is focused on growing production at its gold and antimony operation in Australia, and gold production from its operation in Sweden to generate near term cash flow.
About Equus Mining Limited:
Equus Mining Limited (ASX: EQE) is an Australian Exploration and Development Company listed on the Australian Securities Exchange. Equus is focused primarily on the exploration and development of gold-silver-polymetallic projects in the politically stable and supportive mining jurisdiction of XI Region, Southern Chile. Equus’ projects are strategically located in the northwestern portion of the highly prospective, world class Deseado Massif precious metal district, near existing underutilized mine and processing infrastructure.
This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the proposed sale of Cerro Bayo to Equus Mining Limited. There is no assurance that the proposed transaction will be completed on the terms set out in this press release or at all. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 28, 2019, a copy of which is available under Mandalay’s profile at www.sedar.com. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.