Guyana Frontier Mining Corporation has bought out Infinito Gold Limited’s mining concessions here which include the large-scale alluvial gold mining project at Marudi in Region Nine.
In a press release, Infinito Gold said that the two companies have closed the transactions contemplated by the definitive purchase and sale agreement executed by the parties on December 22, 2010. Under the terms of the agreement, Guyana Frontier (formerly Shoreham Resources Ltd) has acquired 100% of the issued and outstanding common shares of Infinito’s subsidiaries in Guyana and Aruba, which directly and indirectly hold 100% interest in the Marudi Mountain and Paint Mountain and the Potaro mineral concessions.
The agreement replaced and superseded existing option agreements between Guyana Frontier and Infinito in respect of the concessions. The release said that total consideration paid by Guyana Frontier to Infinito for the acquisition is US$500,000 in cash, of which US$100,000 was advanced as a deposit on August 17, 2010, and the remainder of which was paid on the closing of the acquisition, and 1,600,000 common shares of Guyana Frontier, which were issued on the closing of the acquisition.
Infinito has been granted a 2% Net Smelter Returns (NSR) royalty for all future mineral production from the Marudi Mountain and Paint Mountain Project to a maximum of US$3M and a 2% NSR royalty for all future mineral production from the Potaro Project, to a maximum of US$2M, the release said.
Infinito’s local subsidiary, Romanex Guyana Exploration Limited had sought to commence large-scale alluvial gold mining at the Marudi Mountain property.
While Romanex holds the mining licence, Shoreham had previously exercised an option to acquire 75% of the shares of Romanex, which is held by Infinito. Shoreham had signed an agreement with a French mining company Rexma Participacions (Rexma), for that company to work in the Marudi Mountain Gold Project. The company had committed to a major expansion of production capacity within the next two years.
The project had suffered some delays. According to the project summary of the Marudi Mountain project, the project will entail the excavation of mineralized gravel, the establishment of a mineral processing plant for the recovery of gold and the construction of supporting facilities, buildings and road.
