Chilean Metals Inc. recently entered into an agreement to acquire four iron oxide-copper-gold (IOCG) projects from Cogonov Inc.
The projects -- Fox River, Lynn, Parrsboro and Bass River -- have been the subject of major exploration over the last several years by Cogonov and historical owners Minotaur Atlantic Exploration Ltd.
Pending the receipt of tax, corporate and securities legal advice for both parties and the determination of the exact structure of the agreement, the initial agreement letter will be replaced with a definitive agreement.
It is estimated that Chilean Metals will release 26.5 million common shares, directly or indirectly, to the
"Chilean Metals has been negotiating with Cogonov over many months regarding their investing in CMX to fund exploration drilling of our recently assembled Zulema project,"
Chilean Metals CEO Terry Lynch said. "Inclusion of four of Cognonov's Nova Scotia properties in this agreement allows us to diversify into another jurisdiction with IOCG potential, build on strategic alliances and reduce our overall risk in these current market conditions.
"We are impressed with Cogonov's joint venture model and expect to successfully (joint venture) these Nova Scotia properties," Lynch continued. "These business combinations make enormous sense in the current market environment. It gives us a way to grow in a manner mutually beneficial to our respective shareholders."
Under the terms of the letter agreement, Chilean Metals will receive a non-refundable $50,000 fee, half of which has been obtained with the balance due within 14 days.
The parties expect a minimum of $500,000 equity financing for Chilean Metals to be priced at a later date, which will be used for general working capital purposes. At the close of that transaction, Chilean Metals will appoint Patrick Cruickshank to its board of directors and as chief executive officer of the company. Lynch will become company chairman.
"We are excited to join the Chilean Metals IOCG family, and we believe that our strategic advantages and synergies will assist Chilean Metals in achieving their IOCG exploration goals," Cruickshank said.
The entire acquisition is still subject to negotiation by both parties as well as to TSX Venture Exchange and other regulatory approvals.
For more information about Chilean Metals, visit www.chileanmetals.com.
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