Dual listed Brigus Gold (TSX:BRD, AMEX:BRD) has reached a settlement agreement which will see it sell its interest in the Huizopa Project to Cormack Capital Group. The project is located in the Sierra Madre Occidental mountains in Chihuahua, Mexico. The dispute over the Huizopa Project pre-dated the merger between Apollo Gold and Linear Gold, which was rebranded as Brigus Gold.
Brigus confirmed this morning that it would sell the Huizopa Project to Cormack for proceeds of US$3.5 million, payable over a five-year term. Brigus will also retain a 3% Net Smelter Royalty ("NSR") over future production from the Huizopa, though Cormack can reduce Brigus' NSR to 2% by making a US$1 million payment. In addition, Brigus will receive a production bonus payment of US$5 million within one year of the commencement of commercial production at the Huizopa Project.
“Settlement of the dispute allows Brigus to focus on its advanced Canadian asset portfolio while maintaining a significant royalty in the prospective Huizopa Project and receiving payments of up to US$9.5 million,” Brigus stated this morning.
Huizopa was not considered a key asset to Brigus Gold, which is focused on its Black Fox Mine and Goldfields Project.