Kerr Mines Inc. (TSX: KER) (OTC: KERMF), is pleased to announce it has entered into an agreement to acquire a 3% Gross Production Royalty from Trans Oceanic Mineral Company Ltd. which will reduce the aggregate Royalty on the Copperstone Gold Mine from 6% to 3%.
The Copperstone Gold Mine is currently subject to an aggregate 6% Royalty held by TOMCL (4.5%) and the Angie Patch Survivor’s Trust (1.5%). The purchase agreement entered into between the Company’s subsidiary, Bonanza Explorations Inc. and TOMCL provides for the buyback of a 3% Royalty held by TOMCL for US$2,500,000 on or before March 31, 2021. The Royalty Buyback is conditional on the Company successfully arranging project financing for the re-start of production at the Copperstone Gold Mine.
Giulio T. Bonifacio, Chief Executive Officer stated: “We are extremely pleased with the ability to buy down the current royalty which will significantly enhance Copperstone’s project economics. The value to be paid will also prove of great benefit to all stakeholders moving forward as we continue our efforts to grow the resource and reserve at the Copperstone Gold Mine.
The proposed Royalty purchase constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holder in Special Transactions as TOCML is owned by Fahad Al Tamimi, a director of the Company and the beneficial owner of 63,273,463 common shares of the Company, or approximately 20.3% 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 consideration to be paid to TOMCL for the purchase of the Royalty does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101.
About Kerr Mines Inc.
Kerr Mines is an Emerging American Gold Producer currently advancing the 100% owned, fully permitted past-producing Copperstone Mine project to production. Copperstone is a high-grade gold project located along a detachment fault mineral belt in mining-friendly Arizona. This gold project in Arizona demonstrates tremendous exploration potential targeting multi-million-ounce prospects within a 50 Square kilometers (12,259 acre) land package.
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