Wednesday, 26 October 2016 by Lulu Rumsey
The Belo Horizonte office of Azevedo Sette Advogados and Toronto law firm Torkin Manes LLP have helped Canada’s Jaguar Mining sign an earn-in agreement to sell a Brazilian gold deposit to copper miner Avanco Resources.
Avanco hired Brazilian mining boutique FFA Legal for the deal, which closed on 4 October.
The earn-in arrangement hands Avanco the opportunity to buy the entirety of the Gurupi gold deposit, in several stages. Initially, it has the right to earn 20% of Jaguar’s interest in the deposit if it pays Jaguar a cash fee of US$1.7 million, plus an additional fee of US$500,000 in cash or shares of Avanco, and by investing a minimum of US$300,000 in exploration and permitting for the project.
Depending on whether it meets certain milestones, Avanco has the option to up its stake in the project to 80%. Some of those milestones will depend on the findings of a classification study and whether Avanco can demonstrate it has adequate funding to finance construction of a processing plant. Avanco can acquire the remaining 20% interest in the project at any time by paying either US$6.25 million or US$12.50 per ounce of gold, whichever is greater.
If Avanco cannot demonstrate adequate funding for the project, Jaguar will have a one-time right to buy-back a 31% interest in Gurupi, and control of the deposit, by paying Avanco reasonable costs and expenses incurred in the classification study.
Gurupi has 3.6 million tonnes of gold, but the project has stumbled in the past due to permitting issues. Jaguar took over the project from Kinross in 2009.
The deposit is located in the state of Maranhão.
Counsel to Jaguar Mining
Azevedo Sette Advogados
Partner Roberto Ribas Wilson and associates Fernanda Santiago, Gabriela Salazar and Thiago Assumpção in Belo Horizonte
Torkin Manes LLP
Associate Amira Abouali in Toronto
Counsel to Avanco Resources
FFA Legal
Partner Luis Azevedo in Rio de Janeiro
London, 28 October 2016. News / Brazil, http://latinlawyer.com/news/article/50420/gurupi-gold-deposit-changes-hands/