Emerita to acquire Salobro zinc project for US$6.5M
Emerita Resources Corp. has agreed to acquire the Salobro zinc project in Brazil for $6.5-million (U.S.). The company will pay the purchase price in cash over seven years to Vale SA.
EMERITA RESOURCES Corp. has entered into a definitive agreement with Vale SA and IMS Engenharia Mineral Ltda., pursuant to which Emerita has agreed to acquire the Salobro zinc project, located in the municipality of Porteinha, Minas Gerais state, Brazil.
The Salobro project
The Salobro project comprises two mining applications covering 1,209.75 hectares. The thickest intercept to date is 13.92 metres grading 10.39 per cent zinc and 2.13 per cent lead. The known mineralization occurs in three lenses, all of which remain open for expansion by further drilling. A summary of the historical resource estimate can be found on the company’s website. According to the report, the Salobro project deposit is estimated to contain 8.3 million tonnes grading 7.12 per cent zinc plus lead.
The definitive agreement:
Pursuant to the definitive agreement, Emerita agrees to pay $6.5-million (U.S.) in cash to Vale. The cash payments will be made by Emerita over seven years on the following schedule:
• $350,000 (U.S.) within 30 days from the date that the request for assignment of the mining rights, which comprise the Salobro project, to PurchaseCo is filed by IMS or Emerita with the DNPM, Brazil’s national mining agency, and subsequent to Vale its pending claims against IMS;
• $1.65-million (U.S.) on or before the first anniversary of the definitive agreement;
• $1.5-million (U.S.) on or before the third anniversary of the definitive agreement;
• $3-million (U.S.) on or before the seventh anniversary of the definitive agreement.
The rights to the Salobro project are currently subject to litigation between Vale and IMS. In connection with this transaction, Vale will withdraw its claims pe nding against IMS in the Civil Court of Belo Horizonte in respect of the amounts Vale claims are owing to it in relation to IMS’s previous acquisition of the Salobro project. Such claims currently are registered as encumbrances on the mining rights. Emerita will pay Vale’s legal fees and court costs in connection with withdrawing such claims. Vale’s legal fees are 750,000 Brazilian reais (approximately $300,000), and its court costs are estimated to be 10,000 Brazilian reais (approximately $245,000 (U.S.), or $315,000, in total). PurchaseCo shall hold the Salobro project in trust for Vale until the consideration has been fully paid by Emerita.
The IMS binding letter of intent
Emerita and IMS have entered into the binding letter of intent pursuant to which Emerita has agreed to incorporate and organize PurchaseCo. Emerita will own 75 per cent of the voting securities of PurchaseCo and IMS will own 25 per cent of the voting securities of PurchaseCo.
As consideration for IMS transferring the rights to the Salobro project to PurchaseCo, Emerita shall issue one million common shares in the cap i tal of Emerita to IMS or its nominee on the date the DNPM approves the transfer of the mining rights from IMS to PurchaseCo.
Emerita has the right to acquire IMS’s 25-per-cent interest in PurchaseCo, up to 48 months from the date of definitive agreement execution, by paying $2-million in cash to IMS or its nominee and issuing an additional one million Emerita shares to IMS or its nominee. Emerita and IMS expect to sign a definitive agreement within the next 90 days.
David Gower, chairman of Emerita, commented: “Emerita is excited to commence work on such an exciting zinc project. The Salobro deposit mineralization was delineated by the highly respected technical group of Vale and remains open for future expansion. The project is located in an area with excellent infrastructure and a supportive environment for responsible mine development. Emerita has an excep-
tional technical team in Brazil and is ready to advance the project quickly.”
Joaquin Merino, president and chief executive officer of Emerita, stated: “This is an exceptional opportunity for Emerita given the successful drilling to date by the previous operators. Emerita also continues to be fully committed to acquiring the Aznalcol lar zinc pro ject in Spain and, with success, will have a very strong, advanced zinc project portfolio going forward.”
The company also announces that the non-binding letter of intent with a large mining company regarding the proposed acquisition of the Masa Valverde project by the com pany has bee n terminated.
We seek Safe Harbor.
Erika Flores condensed this news release (email@example.com).
Marilia Bento, David Patrick Gower, Joaquin Merino-Marquez, David Michael Patterson, Catherine Stretch, Colin David Watt
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