Sunday, 03 Jul 2011
Strike Resources has executed an agreement with Iron Associates Corporation to purchase an additional 12% interest in Apurimac Ferrum SA from IAC increasing its stake in AF to 56%.
The strategic acquisition was made for a consideration of USD 1.2 million and 9 million SRK shares. AF is the Peruvian company through which Strike holds its interest in the Apurimac and Cusco iron-ore projects in Peru. In addition an exclusivity agreement has been signed with D&C Group to negotiate the potential purchase of remaining AF shares on similar terms.
Strike has been in discussions with the AF shareholders over the past year to explore opportunities to increase its shareholding in AF. This transaction is the first stage in the company strategy to simplify the AF shareholding structure and increase and consolidate its presence in the prospective Apurimac and Cusco regions of Peru.
Key terms of the agreement are:
1. IAC to assign to Strike a loan of USD 5.245 million owed by AF to IAC. This loan is convertible to shares in AF in 2012 under the terms of the Settlement Agreement between the AF shareholders.
2. IAC held a right, in certain circumstances, to convert its AF shareholding to a royalty from AF future production. This royalty right has now been extinguished.
3. Strike paid IAC USD 1.2 million in cash on the execution of the agreement and will issue IAC 9 million Strike shares as consideration under the agreement.
These shares will represent 6.3% of Strike issued capital. Strike Resources believes this transaction will provide significant benefits for shareholders in both the short and longer term.
The company said the simplification of the AF shareholding structure will initially improve operational efficiency and reduce risks during the exploration and project execution phases. Over the longer term it will also enhance the ability to attract strategic partners to develop the Apurimac and Cusco iron ore projects.
Strike has also signed an agreement with the other major AF shareholder, the D&C Group, giving Strike negotiating exclusivity for 90 days. Under this agreement the parties agree to negotiate in good faith the potential acquisition of D&C’s share in AF on pro rata terms to the IAC acquisition.
Significantly, Strike will move to 100% ownership of AF if agreement can be reached. If the parties do not agree terms then D&C will have 10 working days to exercise its right to purchase from Strike 50% of the AF shares which Strike acquired from IAC on equivalent terms. In this case Strike and D&C will each hold 50% of AF. (sourced from ProactiveInvestors)
Strike Resources has executed an agreement with Iron Associates Corporation to purchase an additional 12% interest in Apurimac Ferrum SA from IAC increasing its stake in AF to 56%.
The strategic acquisition was made for a consideration of USD 1.2 million and 9 million SRK shares. AF is the Peruvian company through which Strike holds its interest in the Apurimac and Cusco iron-ore projects in Peru. In addition an exclusivity agreement has been signed with D&C Group to negotiate the potential purchase of remaining AF shares on similar terms.
Strike has been in discussions with the AF shareholders over the past year to explore opportunities to increase its shareholding in AF. This transaction is the first stage in the company strategy to simplify the AF shareholding structure and increase and consolidate its presence in the prospective Apurimac and Cusco regions of Peru.
Key terms of the agreement are:
1. IAC to assign to Strike a loan of USD 5.245 million owed by AF to IAC. This loan is convertible to shares in AF in 2012 under the terms of the Settlement Agreement between the AF shareholders.
2. IAC held a right, in certain circumstances, to convert its AF shareholding to a royalty from AF future production. This royalty right has now been extinguished.
3. Strike paid IAC USD 1.2 million in cash on the execution of the agreement and will issue IAC 9 million Strike shares as consideration under the agreement.
These shares will represent 6.3% of Strike issued capital. Strike Resources believes this transaction will provide significant benefits for shareholders in both the short and longer term.
The company said the simplification of the AF shareholding structure will initially improve operational efficiency and reduce risks during the exploration and project execution phases. Over the longer term it will also enhance the ability to attract strategic partners to develop the Apurimac and Cusco iron ore projects.
Strike has also signed an agreement with the other major AF shareholder, the D&C Group, giving Strike negotiating exclusivity for 90 days. Under this agreement the parties agree to negotiate in good faith the potential acquisition of D&C’s share in AF on pro rata terms to the IAC acquisition.
Significantly, Strike will move to 100% ownership of AF if agreement can be reached. If the parties do not agree terms then D&C will have 10 working days to exercise its right to purchase from Strike 50% of the AF shares which Strike acquired from IAC on equivalent terms. In this case Strike and D&C will each hold 50% of AF. (sourced from ProactiveInvestors)
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