Rose (AIM: ROSE), the AIM quoted natural resources business, is delighted to announce (and as anticipated in the announcement on 1 September 2017) that it has signed a binding stock purchase agreement (the “SPA”) with Magellan Gold Corporation (OTCQB: MAGE) (“Magellan”) to dispose of the Company’s mineral processing mill operation in San Dieguito de Arriba, Mexico and its associated assets, licenses and agreements (together, the “SDA Mill”).
Under the terms of the agreement which were announced on 1 September 2017, Magellan will pay a total consideration of US$1.5 million for the SDA Mill, payable as US$1.0 million in cash (less a US$100,000 option payment already received) and US$500,000 in restricted common stock (shares) in Magellan.
The disposal will constitute a fundamental change of business under the AIM Rules and is therefore subject to the approval of Shareholders. The Company has convened a General Meeting on the 18 September 2017 to approve the transaction and a Circular was posted to Shareholders on 1 September 2017 which contains full details in respect of the disposal.
Should the proposed disposal not complete due to it not being approved by the Company’s Shareholders, Rose will be required to reimburse Magellan the US$100,000 option payment already received. This payment would be payable in cash or Ordinary Shares at the Company’s discretion.
On the current schedule, the disposal is expected to complete before the end of October 2017. The SPA includes a number of closing conditions including, in addition to usual completion actions, the completion of due diligence, Magellan completing an audit of the SDA Mill’s financial statements, and the finalisation of the Mexican corporate restructuring to facilitate the disposal.
Matthew Idiens, CEO, commented:
“The signing of the SPA is a major step completed in respect of the SDA Mill disposal, and with the support of Shareholders at the convened General Meeting, we hope to be able to complete the transaction in the coming weeks in order to focus the Company’s operations on the 3D seismic shoot in the Paradox basin in Utah.
We look forward to receiving the balance of funds from Magellan for the disposal at completion, which is expected to dovetail nicely into the timing of the Paradox shoot.”
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