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Minera Alamos formalizes deal with ePower Metals on Guadalupe gold project

The Toronto-based company executed on its previously announced definitive agreement for the assignment of Guadalupe project option to ePower Metals
handshake Mexico
The Guadalupe de los Reyes project is in Sinaloa, Mexico

Minera Alamos (CVE:MAI) announced Wednesday that it has agreed to option its Mexican gold project to ePower Metals Inc (CVE:EPWR).

The Toronto-based company said it will assign the rights to an option to earn a 100% interest in the Guadalupe de los Reyes gold project in Sinaloa State, Mexico, where Minera Alamos has the right to acquire 100% interest in the project through an option agreement with Vista Gold Corp (TSE:VGZ).

The agreement replaces a previously announced letter of intent between Minera Alamos and ePower from April 2019 that would have seen Minera Alamos assign its option rights to acquire the Guadalupe de los Reyes gold project in exchange for around 19.8% of the outstanding ePower shares.

In order to acquire the company’s interest in Guadalupe, ePower must complete a cash payment of US$1.5 million to Minera Alamos and assume the company’s remaining payments of US$3 million owed to Visa Gold. ePower has entered into a loan agreement with arm’s length lenders for C$2 million in order to finance its deposit payments.

READ: Minera Alamos unveils deal with ePower Metals to accelerate Guadalupe De Los Reyes gold project development

ePower must also issue Minera Alamos 9.45 million shares and 3.35 million warrants entitling Minera Alamos to acquire shares at $0.50 per share for a two-year period following the transaction.

In order to complete the transaction, ePower must consolidate its common share capital on a two-for-one bases and complete a C$6 million financing. The transaction is subject to TSX Venture Exchange approval.

Minera Alamos said that ePower has entered into a governance and investor rights agreement that gives it the right to appoint one director to the ePower board as long as Minera Alamos holds at least 5% of ePower’s shares.

The initial nominee for the board is Bruce Durham, according to Minera Alamos.

The junior company may also participate in future financings by ePower to maintain its pro rata equity interest.

In a release, Minera Alamos said it was looking forward to supporting ePower’s activities and the development of Guadalupe.

Shares of Minera Alamos rose 8.3% on Wednesday afternoon in Toronto to C$0.13. ePower’s shares were flat at C$0.15.

Contact Angela at [email protected]

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