To Receive US$15.0 million In Staged Cash Payments And Smelter Royalty
Titan Minerals Limited (ASX: TTM) has completed the sale of the Zaruma mine concessions and the Portovelo Process Plant assets in Ecuador to Pelorus Minerals Limited for consideration of US$15.0 million in staged cash payments plus a 2% net smelter return royalty on future copper production from the Zaruma mine concessions.
Managing Director, Laurie Marsland, said completion of the asset sale will enable Titan to resolve the balance sheet issues it inherited following the acquisition of Core Gold Inc. in 2020 and to focus its full attention on the development of its flagship Dynasty gold project, and exploration at the Copper Duke project and the high-grade Linderos gold project in Ecuador.
“Titan’s focus remains firmly set on developing the Dynasty gold project and advancing the Copper Duke project and Linderos gold project in Ecuador,” Mr Marsland said.
“Sale of the Zaruma mine and the Portovelo Process Plant strengthens our balance sheet and allows us to manage the liabilities we inherited following the Core Gold acquisition.
“It has been a lengthy process to get to this point and we appreciate the continued support shown by our shareholders. Given the improvement in our financial position as a result of this asset sale, we expect to continue drilling and deliver an updated JORC resource at Dynasty following completion of the Cerro Verde drill programme.
“We wish Pelorus every success for itsIPO planned for later this year and for re-establishing operations at the Zaruma mine, which Titan shareholders will retain exposure to through the 2% net smelter return royalty on future copper production.” Transaction Summary The transaction was completed pursuant to a Share Sale Agreement which documents the sale of shares (the “Sale Shares”) by Titan of a number of its subsidiaries (the “Group Companies”) to Pelorus.
“Coincidental with entering into the Share Sale Agreement, Titan and Pelorus also entered into a trust deed under which Pelorus pledged all the Sale Shares in favour of Titan to guarantee timely and complete payment of the staged cash consideration payments under the Share Sale Agreement.”
The intention is that the majority of employees of the Group Companies will transfer across to Pelorus on terms and conditions of employment which are no less favourable than those on which they were employed by Titan. Titan has also offered to assist Pelorus with regard to transition arrangements, initially for a period of up to 60 days.
The Zaruma mine is located in the Zaruma-Portovelo mining district and comprised of thirty (30) concessions totalling 7,615 Ha. The Portovelo Process Plant is a fully operational CIP milling operation located 9 km by road from the Zaruma mine’s Cabo de Hornos portal.
The sale was completed on an ‘as is, where is’ basis and includes the Zaruma mining concessions, mine infrastructure, related mining equipment and machinery, geological data, permits and licences, the Portovelo process plant, process plant infrastructure including buildings and structures located on the property, and three tailings dams.
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