27 July 2018
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VI Mining Plc
(the "Company" or "VI Mining"; NEX: VIM)
VI Mining Plc to acquire Cushuro Gold Project from Karmin Exploration, further consolidating its position in Northern Peru
- Share purchase agreement signed between VI Mining's Peruvian subsidiary and seller Karmin Exploration Inc.; purchase price of US$ 27.5 million to be satisfied in VI Mining shares.
- Cushuro Gold Project comprises three mineral concessions located in the Alto Chicama gold district with title to two further concessions pending and is in close proximity to the Minaspampa processing plant and operation.
- Transaction to close following TSX Venture Exchange approval and other regulatory conditions - expected shortly.
VI Mining Plc (the "Company" or "VI Mining") (NEX Exchange Growth Market: VIM), an emerging gold and silver company with assets in Peru, and its subsidiary One Valley Peru S.A.C. ("Buyer") have entered into a share purchase agreement (the "Share Purchase Agreement") with Karmin Exploration Inc. ("Karmin") to acquire all the shares of its wholly-owned subsidiary Karmin Peru S.A.C. ("Karmin Peru"), which holds Karmin's 100% interest in the Cushuro Gold Project, which comprises the Gaby 2, Gaby 3, Gaby 8, Pandereta 007 and Corona 3113 mineral concessions. The Gaby 2, Gaby 3 and Gaby 8 concessions comprise 3 contiguous claims totalling 2,477 hectares and are adjacent to Minaspampa. Title and registration is pending on the Pandereta 007 and Corona 3113 concessions. Karmin Peru reported $nil revenues and profits for the years ended 30 April 2018 and 2017.
Karmin is a public company whose shares trade on the TSX Venture Exchange and the Lima Stock Exchange. VI Mining's strategy is to develop and operate silver and gold projects in Peru. The Company has two former working silver and gold mines in the La Libertad region in the northwest of Peru - Minaspampa which is currently suspended and Rosario de Belen which is currently on care and maintenance. The Company is currently undertaking detailed engineering work and metallurgical testing in order that production may commence as soon as practicable. In addition to this work, the Company is due to start its drill campaign at both locations soon, the results of which will be presented in an updated NI 43-101 report which is anticipated to be released around the year end 2018 or early 2019. It is expected that the Cushuro asset will enable VI Mining to build on its existing regional asset base.
David Sumner, CEO of VI Mining, commented:
"This acquisition of Cushuro will enable VI Mining to further consolidate its position in La Libertad, one of the most prospective mineral regions in Peru for precious metals. The Cushuro Gold Project is an asset with outstanding resource potential, which will create synergies across our portfolio by consolidating and developing them as a district, given their close proximity. The acquisition of the Cushuro Gold Project is strategically important for the Company as the project is adjacent to the Minas Pampa project and would be able to benefit from the mining infrastructure and processing plant located at Minas Pampa. This acquisition is a further demonstration of the Company's ability to source attractive acquisition opportunities and represents another step towards meeting its ambition to become a leading regional player."
The consideration payable for the shares of Karmin Peru is US$ 27,500,000 (the "Purchase Price"), to be satisfied by the issuance of 5,753,138 VI Mining ordinary shares (the "Consideration Shares") based on the volume weighted average price for the 30 days prior to the Purchase Agreement (the "VWAP"). 5,315,000 Consideration Shares will be issued on completion with the balance on the passing of relevant resolutions at the annual general meeting of the Company to be held on or about 17 September 2018. The Share Purchase Agreement also provides that to the extent the volume weighted average price for the 30 days prior to the second anniversary of closing (the "Year 2 VWAP") is less than the VWAP, then VI Mining will issue to Karmin additional ordinary shares calculated by dividing the Purchase Price by the difference between the VWAP and the higher of the Year 2 VWAP or £2.50.
Pursuant to the terms of the Share Purchase Agreement, VI Mining and Karmin have entered into a lock-up agreement whereby Karmin has agreed to restrict its ability to sell the Consideration Shares until 2 March 2020, being a period of two years from the date VI Mining was admitted to trade on the NEX Exchange.
The closing of the transactions contemplated by the Share Purchase Agreement remain subject to the approval of the TSX Venture Exchange and the satisfaction of certain other conditions precedent.
About VI Mining Plc:
VI Mining Plc is an emerging gold and silver company focused on the development and operation of silver/gold projects in Peru. The Company has contracted to acquire two former working silver/gold mines in the La Libertad region in the northwest of Peru - Minas Pampa and Rosario de Belén. One Valley Peru S.A.C. is a 100% owned Peruvian subsidiary of VI Mining.
About Karmin Peru:
Karmin Peru is a private closed corporation (a Sociedad Anónima Cerrada) existing under the laws of the Republic of Peru, and holds 100% of Karmin's right, title and interest in the mining concessions that form part of, and are known as, the Cushuro Gold Project, located in the Province of Sanchez-Carrion within the Department of La Libertad, Peru.
The common shares of Karmin are listed on the TSX Venture Exchange and the Lima Stock Exchange and trade in both markets under the symbol "KAR". The principal business of Karmin is to acquire, explore and develop resource properties.
David Sumner (CEO)
+971 4 244 3730
Corporate Adviser and Broker
Daniel Stewart & Company PLC
Richard Potts / Nikhil Varghese
+44 (0) 20 7776 6550
Financial Public Relations
Jade Mamarbachi / Charles Pemberton
+44 (0) 20 7396 5331 / +971 50 6003829