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Be the first with the news that moves the market- Despite an ongoing agreement with IAMGOLD, Gran Colombia Gold (GCM) is now considering spinning out its interest in the Zancudo project to ESV Resources
- Previously, Gran Colombia signed an option agreement with IAMGOLD, through which the latter company could earn up to 65 per cent of the property
- Despite initial plans to potentially form a joint venture with IAMGOLD, it seems Gran Colombia has now signed a letter of intent to spin out the interest to TSXV-listed junior ESV
- As part of the proposed transaction, ESV will issue 72 million common shares to Gran Colombia to fully acquire its interest in the project.
- Gran Colombia Gold (GCM) is up 0.97 per cent and is trading at C$6.24 per share
Gran Colombia Gold (GCM) is now considering spinning out its interest in the Zancudo Project to TSXV-listed ESV Resources.
In early 2017, Gran Colombia signed an option agreement with IAMGOLD, through which the latter company could earn up to 65 per cent of the property through cash, shares and exploration costs.
If and when IAMGOLD completes a feasibility study for the project, the two companies planned to commit to joint venture to develop the project through to production.
Now, however, it seems Gran Colombia has signed a letter of intent to spin out its interest to junior explorer ESV.
As part of the proposed transaction, ESV will issue 72 million common shares to Gran Colombia to fully acquire its interest in the project. The shares will be subject to a pooling arrangement, in which one-quarter of the shares will be released over four three-month periods.
Alongside the proposed spin-out, Gran Colombia plans to invest $3 million into ESV subscription receipts a part of concurrent private placement.
Gran Colombia plans to provide in-country operational expertise to ESV, to continue advancing its Colombian projects, which include an upcoming exploration program planned for the Guia Antigua project.
Serafino Iacono, Executive Chairman of Gran Colombia, commenting the proposed spin out.
“In light of the bullish outlook for silver, we see the acquisition of an investment in ESV as a tremendous opportunity to participate in a new vehicle that is turning its attention to becoming a silver focused company looking to offer its shareholders exposure and leverage to the precious metal.
“We also see the spin out of our interest in the Zancudo Project as an opportunity to create value for our shareholders in this undervalued silver-gold asset,” he said.
Gran Colombia Gold (GCM) is up 0.97 per cent and is trading at C$6.24 per share at 2:49pm EDT.
