Rose (AIM: ROSE), the AIM quoted natural resources business, is pleased to provide an update on the potential disposal of the Company’s mineral processing mill operation in San Dieguito de Arriba, State of Nayarit, Mexico and its associated assets, licenses and agreements (together, the “SDA Mill”) to Magellan Gold Corporation (OTCQB:MAGE) (“Magellan”), as announced on 6 March 2017.
Rose has been paid a further US$100,000 for Magellan to secure a 60 day extension of its option to acquire the SDA Mill. Under the terms of the Memorandum of Understanding (“MOU”) between Rose and Magellan, Rose granted Magellan a 90-day option period, for a non-refundable US$50,000 deposit, to purchase the SDA Mill subject to the satisfaction of a number of conditions. The MOU also provides Magellan with the right to extend this option period by a further 60 days in consideration of an additional US$100,000, which will be credited against the final purchase price should the sale proceed. The total purchase price for the SDA Mill is US$1.5 million, payable as US$1.0 million in cash and US$500,000 in restricted common stock (shares) in Magellan.
Magellan has now taken up its right to extend the option period for a further 60 days and Rose has received the corresponding non-refundable payment of US$100,000 in respect of this.
Completion of the disposal of the SDA Mill is subject to a number of conditions, including but not limited to, the Group and Magellan entering into a separate asset purchase agreement, the completion of satisfactory due diligence by Magellan and Rose, Magellan completing a financing to acquire the SDA Mill and an audit by Magellan of the SDA Mill’s financial statements at Magellan’s cost. In addition, as the SDA Mill has contributed the majority of Rose’s revenue in the past 12 months, any sale would be subject to the approval of shareholders of Rose at a general meeting of the Company. There can therefore be no assurance at this stage that the sale of the SDA Mill will be completed.
Should the transaction go ahead, Rose will publish a Circular for Shareholders, with notice of a General Meeting, setting out the full terms of the proposed Disposal and rationale for it.
The Company will provide further updates on the disposal process in due course.
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