Eloro Resources and Cott Oil and Gas Announce $5 Million Option Agreement for a 25% Interest in La Victoria Project, Peru
TORONTO, ONTARIO--(Marketwired - March 3, 2017) - Eloro Resources Ltd. (TSX VENTURE:ELO)(FRANKFURT:P2Q) ("Eloro") is pleased to announce it has signed a letter agreement (the "Agreement") with Cott Oil and Gas Limited ("Cott") (ASX:CMT), granting Cott an option to acquire up to a 25% interest in Eloro's wholly-owned La Victoria Gold Silver Project ("La Victoria" or the "Property"), by completing up to C$5 million in expenditures by July 31, 2018. The Property covers approximately 80.4 square kilometres and is held by a Peruvian-based Eloro subsidiary and is located in Huandoval District, Pallasca Province, Ancash Department, in the prolific North-Central Mineral Belt of Peru.
Under the terms of the Agreement, Cott can earn an initial 10% interest in the Property by expending C$2 million (exclusive of all applicable taxes) by or before October 30, 2017 ("Stage 1 Earn-in Period"), and a further 15% interest ("Stage 2 Earn-in Period") by expending an additional C$3 million (exclusive of all applicable taxes) by or before July 31, 2018. At the end of either the Stage 1 Earn-in Period or the Stage 2 Earn-in Period, a joint venture would be formed between Eloro and Cott on the basis of their respective interest in La Victoria on the typical terms for a joint venture, with Eloro being the operator and the typical dilution provisions.
Pursuant to the Agreement, Cott would grant Eloro a right of first refusal ("RFR") pursuant to which Cott would be obliged to give Eloro at least 60 days prior written notice of any proposed sale of any interest in the Property to a third party and Eloro would have the right to exercise its RFR within 30 days of receipt of such notice from Cott by matching the third party offer. Additionally, should Eloro propose to sell all or a majority of its interest in the Property to a third party, Eloro must first consult with Cott about the identity of the third party and the proposed terms of sale. If Eloro proceeds with the sale, Cott will be obliged to sell its interest to the third party on a pro rata basis in accordance with the terms of Eloro's sale to the third party.