Altamira Gold Corp (CVE:ALTA) (OTCPINK:EQTRF) updated shareholders on Friday about its previously announced US$6 million agreement with Metalstream Ltd to help finance construction of its Cajueiro project in Brazil.
The junior resource company said it may have to terminate the agreement, as Metalstream did not provide the initial payment of US$1 million due on June 23 or the US$5 million due 60 days afterwards.
As such, Metalstream is in breach of the US$6 million gold forward purchase agreement, Altamira said in a statement.
Altamira originally agreed to extend the due date of the initial payment to July 14, with the second payment due date extended until September 14. On July 15, Metalstream told Altamira that its financing was expected to close by the end of July would make its first payment shortly after. To date, Metalstream has not made any payment to Altamira under the agreement.
Altamira CEO Michael Bennett told investors that while Metalstream’s failure to close on their planned financing is “obviously very disappointing”, the firm has not yet made a decision to terminate the agreement.
“(The) ability to terminate the agreement presents an opportunity for Altamira to explore a number of alternative unsolicited offers of financing,” Bennett said in a statement. “Management has made significant advances in completing the necessary engineering and design work at Cajueiro over the last few months and is confident that these advances will increase the likelihood that the company will be able to secure funding for this project."
Located in the state of Mato Grosso, Cajueiro boasts an NI 43-101 resource of 5.7 million tons grading at just over 1 gram per ton gold for a total of 185,000 ounces in the indicated category, and another 12.7 million tons at 1.3 grams per ton gold for 515,000 ounces in the inferred category.
Altamira’s shares were up 23.3% on Friday afternoon at nearly C$0.19.
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