Mandalay to sell Challacollo to Aftermath for $10M

Nov 13, 2019

2019-11-12 10:38 ET – News Release

See News Release (C-MND) Mandalay Resources Corp (3)

Mr. Dominic Duffy of Mandalay reports

MANDALAY RESOURCES CORPORATION ANNOUNCES EXECUTION OF DEFINITIVE AGREEMENT FOR THE SALE OF THE CHALLACOLLO SILVER-GOLD PROJECT IN CHILE

Mandalay Resources Corp. has entered into a definitive agreement with Aftermath Silver Ltd. in respect of the previously announced transaction in which Aftermath will acquire Minera Mandalay Challacollo Ltd. (MMC), which currently owns the Challacollo silver-gold project located in region I (Tarapaca) of Chile.

Pursuant to the terms of the transaction, Aftermath will purchase 100 per cent of MMC in exchange for total consideration of up to $10-million, consisting of $7-million in non-contingent consideration plus a 3-per-cent net smelter returns royalty on production at the Challacollo project, capped at $3-million.

The non-contingent consideration is payable as follows:

  • $1-million in cash payable on or before Nov. 19, 2019;
  • $1-million in cash payable on or before Dec. 30, 2020;
  • $5-million payable on or before April 21, 2021.

The final payment will be payable, at Aftermath’s option, in cash or common shares of Aftermath. In addition, Aftermath may elect to defer payment of 50 per cent of the final payment by one year by increasing the amount of the final payment by $500,000 (such that the final payment would consist of $2.5-million payable on or before April 21, 2021, and $3-million payable on or before April 21, 2022).

In connection with the transaction, Aftermath will also assume Mandalay’s existing contingent payment and royalty obligations to SSR Mining with respect to the Challacollo project under the terms of Mandalay’s acquisition of the Challacollo project from SSR Mining in December, 2013.

Final completion of the transaction (at which time the transfer of ownership of MMC will occur) is subject to the satisfaction of certain conditions, including Mandalay’s receipt of all of the non-contingent consideration. Pending final completion, Aftermath will have the right to conduct certain exploration and drilling activities on the Challacollo project. Aftermath will be conducting an exploration campaign on existing permitted drill pads as soon as possible.

Dominic Duffy, president and chief executive officer of Mandalay, commented: “We are pleased to see the Aftermath transaction executed and the restart of an exploration campaign on the concession. This transaction continues Mandalay’s objective of creating value from its non-operating assets, with the previously announced transactions at Cerro Bayo and the sale of non-core concessions at Challacollo to a third party also completed in the last quarter. Mandalay is now well positioned to focus on improving operations at Bjorkdal and Costerfield with these projects in Chile resolved.”

About Mandalay Resources Corp.

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.

We seek Safe Harbor.

https://www.mandalayresources.com/

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