Montezuma Mining Company (ASX:MZM) has reached an agreement with Grosvenor Gold, a wholly owned subsidiary of Resource and Investment NL, to extend until 29 November 2013, the option to acquire Peak Hill Metals, that owns the Peak Hill gold project in Western Australia.
Grosvenor will pay Montezuma Mining a $50,000 extension fee and will also reduce the exercise price of the options portion of the consideration due to Montezuma if Grosvenor elects to acquire Peak Hill, to $0.35 from $0.75 per option.
Both companies had entered into an options agreement last year under which Grosvenor was to pay an initial option fee of $100,000 for an exclusive option until this March.
Grosvenor could exercise the option by paying Montezuma $2.8 million in cash and issuing 8,400,000 fully paid ordinary shares and 2.1 million options, now at an exercise price of $0.35.
Grosvenor is also to give Montezuma a 1% Gross Royalty, capped at $1M, on all revenue it receives from production from the Peak Hill Project.
The option deal has already been extended once previously.
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