Mexican Gold signs deal to acquire Tatatila project

Executive Summary

• Mexican Gold Mining Corp. entered a definitive agreement to acquire 100 % of the Tatatila project (3,824.36 ha) in Veracruz, Mexico from Chesapeake Gold Corp. and affiliates.
• Consideration will be 4,451,361 common shares of Mexican Gold (≈14.99 % of post‑transaction equity) valued at $222,568 plus a 1.5 % net smelter return royalty, with an optional buy‑back to reduce the royalty to 1 %.
• Shares are subject to a four‑month statutory hold period and staggered lock‑up releases over 2.5 years; transaction completion requires TSX Venture Exchange acceptance and customary closing conditions.

Key Details

• Target Assets: Tatatila project comprising mineral titles covering 3,824.3585 hectares surrounding Mexican Gold’s Las Minas project in Veracruz, Mexico.
• Consideration – Equity: 4,451,361 common shares issued at a deemed value of $0.05 per share (aggregate deemed value $222,568). Post‑issuance, Chesapeake will own ~14.99 % of Mexican Gold’s outstanding common shares.
• Consideration – Royalty: Net smelter return royalty of 1.5 % granted to Chesapeake Mexico; Mexican Gold holds a buy‑back option to purchase 0.5 % of the royalty for $500,000 USD within ten years, reducing the royalty to 1 %.
• Share Hold Periods:
• Statutory hold period: 4 months from issuance (per Canadian securities law).
• Additional lock‑up: Starting one year after issuance, 25 % of the consideration shares release every six months; full release occurs 2.5 years after issuance.
• Closing Conditions: Subject to acceptance by the TSX Venture Exchange and customary closing conditions for a transaction of this nature.
• Strategic Rationale: Tatatila surrounds Mexican Gold’s existing Las Minas project and contains several skarn prospects, including potential extensions of the current resource base, enhancing the company’s exploration footprint in a prolific district.

Notable Quotes

(No direct quotes provided in the release.)