en.Wedoany.com Reported - Elcora Advanced Materials has announced the signing of an agreement to acquire the Eldorado gold mine in the Barberton Greenstone Belt of South Africa, marking the company's entry into gold asset ownership.

Under the binding term sheet (BROT) signed between Elcora and seller Elmaic Trading CC, the transaction covers the purchase of a 100% interest in the Eldorado mineral property, including related surface tailings stockpiles. The acquisition will be conducted through a share purchase, with Elcora acquiring all shares of the seller after it converts to a private company.

The purchase price includes $2 million in cash (approximately C$2.76 million) and 20 million common shares. The transaction is subject to approval from the TSX Venture Exchange (TSXV) and South African regulatory authorities. Completion of the acquisition depends on several conditions, including satisfactory due diligence, execution of a definitive agreement, and renewal or confirmation of relevant prospecting rights.

The agreement outlines a phased ownership transfer process. The first phase will transfer a 50% membership interest, with the final transfer conditional upon obtaining regulatory approvals. The remaining 50% will be transferred based on subsequent obligations specified in the definitive agreement.

Elcora has also committed to a two-phase share issuance. The first tranche of 9.5 million shares will be released upon meeting initial conditions, while the release of the second tranche depends on resource verification milestones, including confirmation of an inferred mineral resource of 1 million ounces of gold and obtaining necessary permits. Under the contract, any shortfall in resource verification may result in adjustments to the number of shares issued.

Elcora plans to complete a preliminary assessment within six months (and no later than 18 months) after the transaction closes. If Elcora fails to complete the assessment on time due to its own negligence, it may result in the immediate issuance of the second tranche of shares to the seller.

Troy Grant, Director, President, and CEO of Elcora, stated that Phase 0 is designed to begin generating cash within the expected timeframe following the acquisition, with part of the funds used to finance the mine development cycle and reduce reliance on dilutive equity financing. The expected timeline and cash flow generation of Phase 0 depend on factors such as tailings characteristics, processing recovery rates, operating costs, and gold prices, all of which remain undetermined. Elcora is moving quickly and prudently toward closing the transaction and commencing Phase 0 operations.

Additionally, Elcora plans to allocate at least an additional $1.3 million for capital and operating expenditures on the project, which is not included in the purchase price. The transaction is targeted for completion by July 15, 2026, but may be extended subject to ongoing TSXV review. The agreement allows either party to terminate the BROT if conditions precedent are not met by the specified deadline.

This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com