Moydow Mines and Gondwana sell Port Loko bauxite interests for cash and deferred consideration
Client
Moydow Mines International Inc. and Gondwana (Investments) S.A.
On July 14, 2008, Moydow Mines International Inc. (TSX:MOY)(AIM:MOY) and Gondwana (Investments) S.A. closed a transaction whereby their respective 50% (indirect) interests in their Port Loko bauxite exploration licence in Sierra Leone were sold to a private company for purposes of accelerated development.
Under terms reached with Sierra Alumina Ltd., a company whose largest shareholder is RAB Special Situations (Master) Fund Limited (an investment fund managed by RAB Capital Plc), Moydow and Gondwana will each receive cash consideration equal to: US$1,525,000 as a non-refundable upfront payment; and US$5 million each on or before November 30, 2008, once Sierra has completed a financing of not less than US$15 million ("Major Financing").
As well, immediately following the Major Financing, Moydow and Gondwana will each receive: shares in Sierra sufficient to ensure that Moydow and Gondwana each have at least 11.25% (17% on a fully diluted basis) of the issued and outstanding shares of Sierra; and warrants in Sierra equal in number to the number of shares they each receive at the same strike price as agreed for participants in the Major Financing.
Sierra may extend the closing date of November 30, 2008 to no later than February 28, 2009 through the advance payment of an additional sum of US$1 million to each of Moydow and Gondwana (for an aggregate of US$2 million).
Sierra has concurrently purchased all of the share capital of Argyll Resources Corporation, a company that had disputed ownership of the Port Loko project.
Moydow and Gondwana were advised in this transaction by a team from Fasken Martineau comprised of Al Gourley and Dimitri Cavvadas.
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