Kerr Mines Inc. (TSX: KER) (OTC: KERMF) and Star Royalties Ltd. are very pleased to jointly announce the execution of a definitive US$18,000,000 gold purchase and sale agreement to finance the restart of underground operations and gold production at the Copperstone Gold Mine in Arizona, USA.
Giulio T. Bonifacio, Chief Executive Officer of Kerr, stated: “This Streaming Agreement provides the required project financing to restart gold production at our Copperstone Gold Mine, which is targeted for Q4-2021. We are extremely pleased to be undertaking this financing transaction with Star Royalties, which has a seasoned team of mining professionals that will prove to be a valued partner as we advance Copperstone to production. With the extensive project evaluation undertaken by Star Royalties, we believe this streaming transaction further validates the value we have identified at Copperstone by way of our recent optimization efforts. We also note that we will be progressing the restart of operations under a whole ore leach processing scenario which will result in increased gold recoveries and production versus a floatation processing scenario.”
Alex Pernin, Chief Executive Officer of Star Royalties, commented: “We are proud to announce our partnership transaction with Kerr to advance the restart of Copperstone. We have structured a mutually beneficial streaming arrangement which should translate to a win-win outcome for both parties’ shareholders. This gold stream will provide for significant, near-term cash flow from a highly prospective deposit in a world-class jurisdiction. We look forward to the successful restart at Copperstone and to its exploration upside under Kerr’s experienced and knowledgeable management team.”
The US$18 million advance payment under the Streaming Agreement will be provided in three equal installments, with the first US$6 million installment to be advanced on the initial closing, which is expected to take place on or before November 20, 2020. The remaining two tranches will be advanced at the request of Kerr as it incurs expenditures for the restart of Copperstone Gold Mine Project with US$6 million on or before February 28, 2021 and a further US$6 million on or before April 30, 2021.
Key Transaction Terms
In connection with the entering into of Streaming Agreement, Kerr, Trans Oceanic Minerals Company Ltd. and Braydon Capital Corporation have amended certain terms and conditions of the outstanding debt held by TOMCL and Braydon. In particular, the parties have agreed as follows:
The proposed amendments to the terms of the promissory notes constitute related party transactions within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holder in Special Transactions as TOMCL is owned by Fahad Al Tamimi, a director of the Company and the beneficial owner of 67,956,003 common shares of the Company, or approximately 19.6% of the total issued and outstanding common shares and as Braydon is owned by Claudio Ciavarella, a director of the Company and the beneficial owner of 30,764,937 common shares of the Company, or approximately 8.9% of the total issued and outstanding common shares. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the transaction as it relates to each of TOCML and Braydon does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The note amendments were approved by the independent members of the board of directors of Kerr. Kerr will be filing a material change report in respect of the Streaming Agreement and the Note Amendments less than 21 days prior to the effective date of the Note Amendments as the Note Amendments are being made in connection with the Streaming Agreement and, as such, could not be announced prior to the announcement of the Streaming Agreement.
About Star Royalties Ltd.
Star Royalties Ltd. is a growth-oriented, precious metals-focused royalty and streaming company. We pursue high-quality cash flow generation and shareholder value creation through the origination and acquisition of royalties and streams. By specializing in custom-made and operator-friendly financing solutions, our objective is to be uniquely aligned with our counterparties and to provide our investors with leverage to rising precious metal prices. We aim to become the preferred mine financing partner for producers, developers and explorers.
About Kerr Mines Inc.
Kerr Mines is an emerging American gold producer advancing the restart of production at its 100-per-cent-owned, fully permitted past-producing Copperstone mine project, located in mining-friendly Arizona. The Copperstone mine project demonstrates significant upside exploration potential that has yet to be drilled within a 50 square-kilometre (12,258 acres) land package that includes past production of over 500,000 ounces of gold by way of an open-pit operation. The company’s current focus is on maximizing Copperstone’s potential by defining and expanding current resources and further optimizing the mine’s economics for purposes of the restart of production in 2021.
Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) reported record... READ MORE
Including true width intervals of 6.08 g/t Au over 25.7 m at Stoc... READ MORE
Imperial Metals Corporation (TSX:III) reports financial results ... READ MORE
McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reported its first qu... READ MORE
Cameco (TSX: CCO) (NYSE: CCJ) reported its consolidated financial... READ MORE