Cerrado Gold Inc. (TSXV: CERT | OTCQX: CRDOF) has announced the receipt of the second advance of US$1M under the signing loan entered into with Amarillo, a wholly-owned subsidiary of Hochschild Mining PLC, whereby Cerrado has granted to Amarillo the option to purchase a 100% interest in the company’s Monte Do Carmo project located in the State of Tocantins, Brazil, for total consideration of US$60M.
Mark Brennan, CEO, and chairman commented, “The second advance under the signing loan demonstrates the good progress that Cerrado and Hochschild are making to complete the proposed transaction, and this cash infusion, along with the strong production rates over the last two months and strong gold prices will further assist in our continued debt reduction activities at MDN.”
A total of US$15M is expected to be advanced by way of a 10% interest-bearing secured loan, of which US$8M has now been advanced. The balance of US$7M is expected to be advanced within two days following the mailing by Cerrado to its shareholders of a notice of meeting and management information circular in connection with a meeting to approve the proposed transaction to be held on 27 June 2024.
Cerrado expects to mail the management information circular not later than 5 June 2024. Upon obtaining Cerrado shareholder approval, the signing loan, together with all accrued and unpaid interest thereon and expenses relating thereto, shall be deemed to be repaid in full by Cerrado by the concurrent set off of an amount equal to the signing loan due by Amarillo as part of the purchase price.
If Cerrado fails to secure shareholder approval on or before 30 June 2024, the signing loan will mature on 30 September 2024.
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