Canamex to sell metal stream of gold for $35M (U.S.)

Jan 27, 2020

2020-01-27 12:16 ET – News Release

Mr. David Vincent reports

USD$ 35 MILLION GOLD FORWARD PURCHASE AGREEMENT

Canamex Gold Corp.’s Canamex Resources U.S. Inc. has signed a definitive gold forward purchase agreement with an arm’s-length third party investor for proceeds of up to $35-million (U.S.) ($46-million (Canadian)). The proceeds will be allocated to the further development of the Bruner gold project, located in Nevada, United States.

General terms of the sale

Subject to the terms and conditions of the agreement, the supplier has agreed to sell to the buyer a metal stream of 50,000 ounces of gold. All deliveries to the buyer of gold are in the form of certified bullion with a fineness grade of greater than 99.50 per cent at a minimum of 5,000 ounces per year, commencing on the earlier of (i) 120 days after commercial production at the project is declared by the supplier and (ii) 36 months after the completion date, being April 14, 2020.

Purchase price

Subject to the terms and conditions of the agreement, the buyer will pay to the supplier the following purchase price with respect to the gold that is sold and delivered by the supplier to the buyer:

Fixed price of $700 (U.S.) for each ounce of gold sold and delivered under the agreement for an aggregate of $35-million (U.S.);
An aggregate of 9.9 million equity securities, representing 9.9 per cent of the fully diluted equity of the buyer, to be paid and issued to the company.

The cash payment will be advanced to the supplier as follows:

$5-million (U.S.) on or before April 14, 2020, to discharge debentures and debenture security pledge and registration of a 12.5-per-cent net smelter return (NSR) on the project in the name of the buyer;
$5-million (U.S.) after the supplier provides evidence to the buyer of the registration of the 12.5-per-cent NSR in the name of the buyer and discharge of the debenture security pledge;
$25-million (U.S.) after initial construction permitting is completed.

Royalty

The supplier will register to the buyer up to a 12.5-per-cent NSR over the project, to be registered in Nevada. The buyer will not enforce payments against the royalty, provided that the terms of the agreement relating to the delivery of gold purchased under the agreement are being met by the supplier. The royalty evidenced by the NSR filing will expire and be released against the project upon the date all purchased gold has been delivered to the buyer. If the agreement is terminated for any reason prior to delivery of all gold purchased under the agreement, then the royalty shall survive such termination.

Right of first refusal

The buyer also has a right of first refusal to enter into a financing arrangement with the supplier, after an initial 400,000 ounces of total production has been achieved, to purchase an additional gold metal stream from the project of 12.5 per cent of any future gold production, but limited to 50,000 ounces in total from additional resources, and deliverable at a minimum of 5,000 ounces per year, commencing 120 days after commercial production is declared for additional resources, that have been placed into production. In the event that the buyer exercises the right of first refusal, the buyer shall pay to the supplier a purchase price with respect to the gold of 60 per cent of the prevailing gold spot price in effect as of the date on which the right is exercised. The right cannot be exercised before a preliminary economic assessment that establishes the existence and the economic viability of additional resources at the project is completed and released.

Website update

The company website has been updated to a new user-friendly and modern format. The company website can be accessed on-line.

About Canamex Gold Corp.

Canamex is a public listed company registered in British Columbia, Canada, trading on the Canadian Securities Exchange, and is engaged in predevelopment of the Bruner gold and silver project in the prolific gold jurisdiction of Nye county, Nevada. The region is home to several producing and past-producing mines along the Walker Lane trend. Canamex completed a positive preliminary economic assessment (PEA) on the Bruner project in 2016.

We seek Safe Harbor.

https://www.canamexgold.com/