Infinito Gold Ltd. Announces Regulatory Approval Regarding the Sale of Certain Mine Processing Equipment and TSXV Tier Reclassification
Trading Symbol: TSXV: IG
CALGARY, Feb. 20, 2013 /CNW/ - Infinito Gold Ltd. ("Infinito Gold" or the "Company") announces that the TSX Venture Exchange ("TSXV") has accepted for filing the asset purchase agreement (the "Agreement"), which was previously announced by the Company on January 28, 2013.
Under the terms of the Agreement, Zandor Capital S.A. Colombia, (the "Purchaser"), will acquire from the Company's wholly-owned indirect subsidiary in Costa Rica, Industrias Infinito S.A. ("IISA"), certain mine processing equipment ("Equipment") located in Nicaragua for cash consideration of USD $4,303,000 (the "Purchase Price"). The Purchaser is an arm's length third party and a wholly-owned indirect subsidiary of Gran Colombia Gold Corp.
The Equipment was originally purchased for use at IISA's Crucitas gold project in Costa Rica, but, as previously announced by the Company, a November 2011 ruling by the Tribunal Contencioso Administrativo (administrative court) in Costa Rica rescinded IISA's concession rights and environmental approvals. As a result, the Company has been unable to utilize the Equipment, and the sale of the Equipment will fund the Company's working capital requirements while it is reviewing its legal rights regarding Crucitas and strategic alternatives going forward.
Under the terms of the Agreement, which includes customary representations and warranties by the Company and the Purchaser, the Purchase Price is payable in two equal installments, with the first installment due on or before TSXV acceptance of the transaction, which such payment is expected to be received by the Company now that such TSXV acceptance has been received, with the balance of the Purchase Price due on or before the earlier of the date that is 90 days after such acceptance or the date by which the majority of the equipment, by monetary value, is removed from its current storage site. The Equipment is being sold on an "as is, where is" basis with the Purchaser assuming all costs and associated risks pertaining to the relocation of the Equipment.
The Company intends to use the Purchase Price to fund certain restructuring costs, certain trade credit balances, and the Company's ongoing working capital requirements as it continues to evaluate its legal rights and strategic alternatives going forward. To the extent that IISA may require equipment similar to the Equipment for any future operations in Costa Rica, the Company expects to be able to secure such equipment on commercially acceptable terms.
In conjunction with the TSXV's acceptance for filing of the Agreement, TSXV has advised the Company that, upon closing of the sale of the Equipment, the Company will no longer meet the TSXV's Tier 1 continued listing requirements. Consequently, the TSXV has advised the Company's tier classification will change from Tier 1 to Tier 2 effective February 21, 2013. This reclassification will not result in any change to Infinito's trading symbol, which will remain "IG". The reclassification is not expected to have any material impact on the Company as it continues to evaluate its legal rights and strategic alternatives going forward.
Caution Regarding Forward-Looking Information and Statements
Certain statements in this press release, including the use of the Purchase Price and the Company's evaluation of its legal rights and strategic options, address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. These statements are made as of the date of this release but Company undertakes no obligation to update these forward-looking information or statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking information or statements.
INFINITO GOLD LTD.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Infinito Gold Ltd.