Ora Gold Limited (ASX:OAU)

Westgold Strategic Alliance and Placement

Ora Gold Limited (ASX: OAU, Ora or the Company) is pleased to advise it has entered into a binding agreement with Australian gold producer Westgold Resources Limited (WGX:ASX, OTCQX: WGXRF) (Westgold) in relation to a strategic co-operation relationship (Strategic Alliance) and $6.0 million placement (Strategic Placement) (together the Westgold Transaction).


Highlights:
  • Ora has entered into a binding agreement with the dominant gold miner in the Murchison region, Australian gold producer Westgold Resources Limited (WGX:ASX, OTCQX: WGXRF) in relation to a:
    • Strategic Alliance with the primary aim of advancing the development of Ora’s Crown Prince deposit into production; and
    • Strategic Placement of $6.0m at $0.0045 per share, equivalent to a fully diluted 15.0% pro forma shareholding in Ora
  • As part of the Strategic Alliance, Ora and Westgold to separately agree the terms of an ore purchase agreement
    • Ora’s Crown Prince deposit, which hosts a Mineral Resource of 240koz at 4.1g/t Au1 is located approximately 33km via road from Westgold’s Bluebird Mill
  • Upon completion of the Strategic Placement, Westgold to have a right, but not an obligation, to an Ora board seat and equity participation right
  • Strengthened pro forma balance sheet of c. $8 million cash and nil debt, allowing Ora to accelerate further resource development, project development and mining proposal workstreams at Crown Prince as well as continue systematic regional exploration across Ora’s commanding 677km2 tenure
  • The Westgold Transaction provides Ora and its shareholders with a clear pathway to commercialising Crown Prince in the current gold price environment, validates the quality of the deposit and enables Ora to leverage Westgold’s internal resources, intellectual property and infrastructure to accelerate the development of Crown Prince
  • An updated Mineral Resource Estimate at Crown Prince is due for completion in the September quarter and preliminary project development and mining proposal workstreams for Crown Prince are already underway

Ora’s CEO, Alex Passmore, commented:We are very pleased to announce the Westgold Strategic Alliance and Placement, which provides a short and tangible pathway to production and cash flow from Crown Prince. Ora and Westgold will work collaboratively over the next few months to define the development timetable. This alliance with a large regional operator with extensive processing infrastructure gives us strong confidence in the potential for future economic extraction of other advanced projects within our tenure.

STRATEGIC ALLIANCE

Upon completion of the Strategic Placement, Ora and Westgold agree to enter into a strategic co-operation relationship. The primary aim of the Strategic Alliance will be to advance the development of Ora’s Crown Prince deposit (Crown Prince) into production and any other mining opportunities within the Ora tenure.

As part of the Strategic Alliance, Ora and Westgold will use their best endeavours to agree the terms of a proposed ore purchase agreement, to be agreed and detailed in a separate document negotiated between the parties (OPA). A key term of the OPA will include Ora granting to Westgold a right of first refusal in respect of the future purchase of all ore produced from any tenements owned by Ora (as at the time of the Strategic Placement settlement), to be processed at Westgold’s Bluebird Mill at Meekatharra (Bluebird).

Crown Prince hosts a Mineral Resource of 240koz at 4.1g/t Au1 and is located on a granted Mining Lease with a Native Title Agreement in place. The deposit is located approximately 33km northwest from Bluebird and is easily accessible just off the Meekatharra-Mt Clere public road and the Great Northern Highway, supporting efficient haulage logistics (refer Figure 1).

In addition to the OPA, the Strategic Alliance may also encompass other strategic collaboration initiatives to be agreed on a best endeavours basis such as access to Westgold’s camp and associated facilities and leveraging Westgold’s internal resources and intellectual property to fast track the development of Crown Prince.

Upon completion of the Strategic Placement, Westgold will also have:

  • An equity participation right whereby Ora must ensure that Westgold is given at least 10 Business Days’ prior written notice, on a confidential basis, of such a proposal to undertake a prescribed equity offer, being any equity issuance excluding a bonus issue, pro-rata entitlement issue, dividend / distribution plan or employee incentive scheme (Equity Participation Right); and
  • The right, but not the obligation, to nominate a representative to serve on the Ora Board in the capacity as a non-executive director while Westgold’s shareholding in Ora remains above 10% (Board Nominee Right).

Click here for the full ASX Release

This article includes content from Ora Gold, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.

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Cautionary Statements

This press release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts, including statements regarding future estimates, plans, objectives, timing, assumptions or expectations of future performance, including without limitation, statements regarding the completion of the Offering and the timing thereof, and the anticipated use of proceeds of the Offering are forward-looking statements and contain forward-looking information. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as "intends" or "anticipates," or variations of such words and phrases or statements that certain actions, events or results "may," "could," "should" or "would" or occur. Forward-looking statements are based on certain material assumptions and analyses made by the Company and the opinions and estimates of management as of the date of this press release, including, but not limited to, that the Company will complete the Offering on the terms disclosed, that the Company will receive all necessary regulatory approvals for the Offering, that the Company will use the proceeds of the Offering as currently anticipated; and assumptions relating to the state of the financial markets for the Company's securities. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Important factors that may cause actual results to vary, include, without limitation, that the Company may not be able to raise funds under the Offering, as currently anticipated, that the Company may fail to receive any required regulatory approvals for the Offering, that the Company will not use the proceeds of the Offering as anticipated, market volatility, unanticipated costs, changes in applicable regulations, and changes in the Company's business plans. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial outlook that are incorporated by reference herein, except in accordance with applicable securities laws. The Canadian Securities Exchange (CSE) has not reviewed, approved, or disapproved the contents of this press release.

SOURCE Quimbaya Gold Inc.

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