Lago DouradoMinerals Ltd. said March 29 that it signed an agreement to acquirea 100% interest in 1,400 contiguous claim units known as the East Block in theSandy Lake district of northwestern Ontario from , for 40 million Lagoshares.
The transaction will also see Lago acquiring GPM's option tosecure up to a 70% interest in the Weebigee gold project in the Canadian province. GPMMetals signed theoption agreement with GoldeyeExplorations Ltd. in April 2015.
According to the agreement, GPM must distribute the Lagoshares to its shareholders immediately following the acquisition. Lago willincrease its board to five directors, three of whom will be nominated by Lagoand two of whom will be nominated by GPM.
Lago may also change its name to Sandy Lake Gold Inc.
In addition, the company is required to raise at least C$1million via a private placement, with at least C$750,000 to be raised viaflow-through securities and at least C$250,000 to be raised throughnon-flow-through shares.
The acquisition is non-arm's-length, as Daniel Noone is adirector of both Largo and GPM, while Rosseau Asset Management Ltd. owns 25.19%of Lago shares and owns 15.44% of GPM shares.