Gran Colombia Gold Corp. plans to acquire roughly 15% of Sandspring Resources Ltd., buying C$4 million in shares and selling it a 30% interest in a Colombian exploration property. The companies said June 12 that they signed a letter of intent outlining the transaction.
Meanwhile, Sandspring said it would consolidate rights to the exploration property, called Guia Antigua, buying a 70% interest from another party, and it intends to run a C$9 million nonbrokered private placement.
The move brings aboard a strategic investor for Sandspring, cashes it up and adds another prong to its portfolio beyond the Toroparu gold project in Guyana. Toroparu is a sizable, advanced-stage gold project that hosts 127.1 million tonnes in proven and probable reserves grading 1 g/t gold for 4.1 million contained ounces of gold.
Gran Colombia, a junior gold producer with operations in Colombia, said it will sell its 30% stake in Guia Antigua for 15 million Sandspring shares. Gran Colombia said Guia Antigua is a joint venture that comprises exploration, development and mining rights within its Segovia mining title.
To consolidate the project, Sandspring said it signed a letter of intent with GA Mine Corp. to buy the remaining 70% interest in Guia Antigua for 21 million Sandspring shares and US$1.1 million in cash. Sandspring said GA Mine Corp., through unit Arcadian Mineral Corp., has the right to acquire a 70% interest in the project from Industrias Argentum SAS, the project operator.
Each unit in the placement will comprise 1 common share and 1 share purchase warrant with an exercise price of 40 cents that expires after 60 months.
Apart from funding mineral exploration, a feasibility study of Toroparu, a hydro project and other expenses, Sandspring said the financing would back the acquisition of Guia Antigua, the cost of which it pegged at about C$1.5 million.
