Latin Gold (ASX: LAT) has been granted a trading halt by the ASX pending an announcement concerning the settlement of the sale of the Paron Gold Project, with the company's shares placed in pre-open.
Latin initially announced to the market towards the end of 2010 that an agreement had been reached with Coronet Metals (TSX: CRF.H) - a British Columbia, Canadian registered company - for the sale of 100% of the company's interest in Paron, which is located in Peru, and certain mining information on other projects located within South America.
Terms of the sale as stated in Latin June quarterly
The sale was completed in Peru on 3 June with US$5.5 million being received in cash and US$2.0 million in Coronet shares.
Of the US$5.5 million in cash US$3.75 million is currently held in an escrow account awaiting a tax certificate from Peruvian authorities.
The balance of the consideration relating to the sale of Paron is milestone linked with US$1.5 million payable within 5 days of commencement of construction of site works (directly related to the installation of a mine or mill) and a bonus of US$1.0 million payable at the same time if the JORC resource exceeds 275,000 ounces of gold.
US$2.0 million is then payable within 5 days of the 12 month anniversary of the initial gold pour and US$2.0 million is payable within 5 days of the 24 month anniversary of the initial gold pour.
In addition to the sale consideration, Coronet shares to the value of US$2.5 million will be issued within 5 days of a JORC inferred resource of equal to or greater than 250,000 ounces of gold being defined within the Paron Deeps exploration target (the Paron Deeps target is an undrilled potential hanging wall extension to the existing Paron resource).
An overriding 1.0% gross royalty on all production from Paron in excess of 200,000 ounces is also payable.