Infinito Gold Ltd. Announces Regulatory Approval Regarding the Sale of Certain Mine Processing Equipment and TSXV Tier Reclassification
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SOURCE Infinito Gold Ltd.
Trading Symbol: TSXV: IG
CALGARY, Feb. 20, 2013 /CNW/ - Infinito Gold Ltd. ("Infinito Gold" or
the "Company") announces that the TSX Venture Exchange ("TSXV") has
accepted for filing the asset purchase agreement (the "Agreement"),
which was previously announced by the Company on January 28, 2013.
Under the terms of the Agreement, Zandor Capital S.A. Colombia, (the
"Purchaser"), will acquire from the Company's wholly-owned indirect
subsidiary in Costa Rica, Industrias Infinito S.A. ("IISA"), certain
mine processing equipment ("Equipment") located in Nicaragua for cash
consideration of USD $4,303,000 (the "Purchase Price"). The Purchaser
is an arm's length third party and a wholly-owned indirect subsidiary
of Gran Colombia Gold Corp.
The Equipment was originally purchased for use at IISA's Crucitas gold
project in Costa Rica, but, as previously announced by the Company, a
November 2011 ruling by the Tribunal Contencioso Administrativo
(administrative court) in Costa Rica rescinded IISA's concession rights
and environmental approvals. As a result, the Company has been unable
to utilize the Equipment, and the sale of the Equipment will fund the
Company's working capital requirements while it is reviewing its legal
rights regarding Crucitas and strategic alternatives going forward.
Under the terms of the Agreement, which includes customary
representations and warranties by the Company and the Purchaser, the
Purchase Price is payable in two equal installments, with the first
installment due on or before TSXV acceptance of the transaction, which
such payment is expected to be received by the Company now that such
TSXV acceptance has been received, with the balance of the Purchase
Price due on or before the earlier of the date that is 90 days after
such acceptance or the date by which the majority of the equipment, by
monetary value, is removed from its current storage site. The Equipment
is being sold on an "as is, where is" basis with the Purchaser assuming
all costs and associated risks pertaining to the relocation of the
The Company intends to use the Purchase Price to fund certain
restructuring costs, certain trade credit balances, and the Company's
ongoing working capital requirements as it continues to evaluate its
legal rights and strategic alternatives going forward. To the extent
that IISA may require equipment similar to the Equipment for any future
operations in Costa Rica, the Company expects to be able to secure such
equipment on commercially acceptable terms.
In conjunction with the TSXV's acceptance for filing of the Agreement,
TSXV has advised the Company that, upon closing of the sale of the
Equipment, the Company will no longer meet the TSXV's Tier 1 continued
listing requirements. Consequently, the TSXV has advised the Company's
tier classification will change from Tier 1 to Tier 2 effective
February 21, 2013. This reclassification will not result in any change
to Infinito's trading symbol, which will remain "IG". The
reclassification is not expected to have any material impact on the
Company as it continues to evaluate its legal rights and strategic
alternatives going forward.
Caution Regarding Forward-Looking Information and Statements
Certain statements in this press release, including the use of the
Purchase Price and the Company's evaluation of its legal rights and
strategic options, address future events and conditions and, as such,
involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the statements. These statements
are made as of the date of this release but Company undertakes no
obligation to update these forward-looking information or statements if
circumstances or management's estimates or opinions should change. The
reader is cautioned not to place undue reliance on forward-looking
information or statements.
INFINITO GOLD LTD.
John Morgan President
Neither the 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.
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