Ecometals Limited: Update Re Closing Of Proposed Sale Of Condor Gold Project
November 19, 2010 at 09:30 AM EST
TORONTO, ONTARIO--(Marketwire - Nov. 19, 2010) - Ecometals Limited (TSX VENTURE:EC)(BERLIN:EDQ)(FRANKFURT:EDQ) -
On 12th January this year, Ecometals Limited (the "Company") announced a proposed sale of its 90% shareholding in Condormining Corporation S.A. ("Condor") and Condorview S.A. ("Condorview") for a sum of US$9 million to Alca Gold Limited. ("Alca"). The Company then negotiated a Sale and Purchase Agreement with Alca. It became clear however during this process that Alca was not going to meet the Company's objectives in terms of process and funding. Ecometals therefore considered other third party options, as well as renegotiating the agreement with Alca. As a result, the Company has finally concluded a revised agreement with Alca which it feels is an acceptable basis for concluding a sale of these assets. The main terms of the revised agreement are as follows:
Alca has agreed to purchase all of the Condor Shares and Condorview shares currently held by Ecometals for an aggregate purchase price of US$7,000,000, based on the following payment schedule;
1. $2,000,000 payable on or before December 15, 2010;
2. $2,500,000 payable on or before May 31, 2011;
3. $2,500,000 payable on or before November 30, 2011.
If after the initial payment of US$2,000,000 Alca fails to make the subsequent payment(s) then the shares in Condor and Condorview will revert to Ecometals, and Ecometals will not have to refund payment(s) made by Alca up to the point of non payment.
CEO Fran Scola said "Ecometals and Alca have individually considered a number of alternatives to resolve this transaction, and we are pleased to announce that through Alca and their commitment to find a financing solution we have been able to achieve a positive result for both parties. Ecometals intends to use the funds raised from this transaction to focus on its exciting Rio Zarza exploration project in Ecuador."
Ecometals Limited is a Canadian TSX Venture Exchange listed mineral exploration and development company focused on mineral resources in Latin America. Apart from its gold exploration in Ecuador, Ecometals also has significant manganese, iron and gold projects in Brazil at grass roots and development planning stages.
Safe Harbour Statement:
This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward looking information. Forward looking information in this news release includes statements regarding the closing of the Transaction. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, failure of the purchaser to secure funding to complete the purchase, failure of Ecometals and/or the purchaser to satisfy conditions of closing, risks relating to changes in economic or regulatory conditions and other risks set out in Ecometals' public documents filed on SEDAR. Although Ecometals believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Ecometals disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.