Freeport acquires controlling interest in TDG’s Aurora West copper, gold property
TDG Gold has entered into a binding joint venture (JV) implementation and purchase agreement enabling NYSE-listed global miner Freeport-McMoRan to acquire an initial 51% ownership interest in the lands comprising the Aurora West project, in British Columbia, for a C$110 million cash payment.
Aurora West is prospective for high-grade porphyry-style gold, copper and silver mineralisation.
TDG points out that the deal excludes its Shasta and Baker properties.
The transaction will involve TDG assigning its rights and interests in the Aurora West property to two newly incorporated British Columbia corporations, or JV companies, in exchange for all of the issued and outstanding shares of each JV company. One JV company will hold two specified mineral claims in the Aurora West area and the balance of the property will be held by the other JV company. Upon completion of this reorganisation, Freeport will purchase from TDG 51% of the outstanding shares of each JV company, with TDG retaining the remaining 49%.
TDG, Freeport and each JV company will enter into a shareholders agreement setting forth the framework for the governance and funding of each JV company and the holding and transfer of interests in each JV company, including options to Freeport to acquire additional ownership interests.
Freeport will have an earn-in option to acquire an additional 24% interest in the one JV company, bringing its interest to 75%, and an additional 49%, bringing its interest to 100%, in the other JV company. Freeport is obligated to spend C$80-million on exploration, to which it has committed to fund C$30-million within the first three years after closing of the transaction.
TDG will not be required to make any contributions to the JV companies during the earn-in period and will retain a 2% net smelter return royalty over the two specified mineral claims within the second JV company.