Chesapeake Gold Announces Sale of Tatatila Project

Executive Summary

• Chesapeake Gold Corp. entered into a definitive agreement to sell its Tatatila gold‑copper project in Veracruz, Mexico to Mexican Gold Mining Corp. (“Mexican Gold”).
• Consideration will be 14.99 % of the outstanding common shares of Mexican Gold (the “Consideration Shares”) plus a 1.5 % net smelter returns royalty on Tatatila; Mexican Gold may repurchase 0.5 % of the royalty for US$500,000 within ten years.
• The Consideration Shares are subject to a lock‑up schedule (25 % released after one year and then semi‑annually) with full release after 2.5 years, and Chesapeake will vote the shares per Mexican Gold’s instructions for that period.

Key Details

• Transaction Structure:
• Sale of Tatatila project → consideration = common shares (14.99 % of Mexican Gold) + 1.5 % NSR royalty.

• Optional royalty repurchase: 0.5 % for US$500,000 within ten years, reducing the royalty to 1.0 %.

• Lock‑Up & Voting Arrangements:

• Statutory four‑month plus one‑day hold period applies.
• After one year, 25 % of Consideration Shares released; thereafter every six months another 25 % releases.
• Full release after 2.5 years from issuance.

• Chesapeake agrees to vote the shares in line with Mexican Gold management instructions for 2.5 years.

• Project Background:

• Tatatila is a gold‑copper skarn district identified by Chesapeake in 2007, surrounding Mexican Gold’s Las Minas Project (NI 43‑101 resource and PEA).

• Several skarn prospects discovered on Tatatila, potentially extending the Las Minas resource.

• Closing Conditions:

• Subject to approval by the TSX Venture Exchange and customary closing conditions for a transaction of this nature.

• Contact Information:

• Jean‑Paul Tsotsos – [email protected] – +1 778 731 1362

Notable Quotes

(No direct quotes were provided in the release.)