Terraco to Exercise Spring Valley Royalties and Enters Into US$19,030,000 Strategic Transaction
VANCOUVER, BRITISH COLUMBIA--(May 16, 2016) - Terraco Gold Corp. (TSX VENTURE:TEN)("Terraco" or the "Company") is pleased to announce that it has entered into definitive agreements with Solidus Resources, LLC, a wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman, LP (collectively, "Waterton"), pursuant to which Waterton will acquire 100% of the Company's claims, leases, title and mineral rights proximate to Waterton's Spring Valley gold project in Pershing County, Nevada ("Spring Valley"), including the Company's Moonlight Project located adjacent to the north of Spring Valley but excluding certain royalties held by the Company, (collectively, the "SV Proximal Assets") in exchange for US$7,000,000 in cash (the "Cash Consideration") and a 2% NSR on the SV Proximal Assets (the "Asset Purchase"). Concurrently with the Asset Purchase, Waterton will subscribe for a senior unsecured convertible debenture in the aggregate principal amount of US$12,030,000 (the "Debenture") in TGC Holdings, Ltd. ("TGC Holdings"), a wholly-owned subsidiary of the Company, (the "Debenture Transaction" and together with the Asset Purchase, the "Transactions"). The Debenture will bear 0.05% (five hundredths of one percent) interest per annum, will have a term of five years and may be converted into either common shares of Terraco ("Terraco Shares") at a price of C$0.18 per share, representing a 57% premium to the Company's twenty-day volume weighted average price of $0.1149 as at May 13, 2016, or into shares of TGC Holdings ("TGC Shares").
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Published: 16 May 2016
Written by Editor