Austral Gold (ASX: AGD) has entered into a subscription agreement with Goldrock Mines Corp (TSX-V: GRM) whereby Austral will subscribe for up to 11,560,000 new shares at C$0.80 per share for a total consideration of C$9.3 million.
Goldrock Mines currently has a market cap. of around C$29 million.
Austral will also be issued 1 new warrant for every new share subscribed, with a strike price of $0.80 for a period of 60 months from closing.
Upon completion of the subscription agreement anticipated by 31 October 2013, Austral Gold will hold up to 15% of Goldrock and will have the right to appoint one non-executive director to Goldrock’s Board and one member to Goldrock’s technical committee.
In addition, the subscription agreement grants pre-emptive or anti-dilution rights, entitling Austral to participate in any future equity offerings to maintain its pro-rata shareholding.
Goldrock holds 100% of the Lindero gold project in northwest Argentina, with proven reserves of 641,000 gold ounces and probable reserves of 878,000 gold ounces at 0.66 to 0.82 grams per tonne gold.
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