Itafos Announces Sale of the Araxá Project

HOUSTON, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Itafos Inc. (TSX-V: IFOS) (“Itafos” or the “Company”) is pleased to announce that it has entered into an agreement (the “Agreement”) to sell its 100% interest in its Araxá project to a wholly-owned subsidiary of St George Mining Limited (“St George”) (ASX: SGQ). The sale is structured as a cash and equity transaction. The total purchase price is cash of USD$21,000,000 and securities of St George (the “Transaction”). As a result of the Transaction, St George will indirectly acquire all of the outstanding securities of Itafos Araxá Mineracao E Fertilizantes S.A (“Itafos Araxá”).

David Delaney, Chief Executive Officer of Itafos, commented: “Today’s announcement of the divestiture of the Araxá asset continues to demonstrate our focus on delivering long term shareholder value through the focus on our core business. The sale of the Araxá Project has been structured as a cash and equity transaction. The structure allows Itafos to retain exposure in further upside in the Araxá asset as it is further derisked. This Transaction underlines our commitment to pursue strategic initiatives that enhance shareholder value as outlined on May 8^th, 2024.”

Under the terms of the Agreement, St George will make a cash payment to Itafos of USD$10,000,000 at closing of the Transaction and will make deferred cash payments of USD$6,000,000 nine months after closing, and USD$5,000,000 18 months after closing (collectively, the “Deferred Payments”). Upon closing of the Transaction, St George will also issue to Itafos (a) ordinary shares of St George (“SGQ Shares”) representing 10% of St George’s outstanding share capital immediately following closing, (b) 9,999,990 options to acquire SGQ Shares at an exercise price of AUD$0.05, expiring three years from the date of issue and (c) 11,111,100 performance rights, convertible into SGQ Shares for no additional consideration upon satisfaction of (i) the closing of the Transaction and (ii) St George reporting an Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC) compliant inferred resource of no less than 25Mt @ 3.5% total rate earth oxide (“TREO”) at a cut-off of 2% TREO within five years from the date of issue.