Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Tango Gold Mines Incorporated (“Tango” or the “Company”) (TSX VENTURE:TGV) announces that it has entered into an arms-length definitive acquisition agreement with private South African companies (together referred to as “African Star“) and certain of their shareholders. Tango has agreed to issue 49,000,000 shares at a deemed price of $0.05 (“Payment Shares“) to acquire a 51% interest in African Star, which: (i) holds a 100% interest in the Oena Diamond Project (“Oena“), a past producing alluvial diamond property covering 8,800 hectares located in the Northern Cape Province, South Africa; and (ii) has four toll treatment contracts in respect of four mutually exclusive coal operating and production collieries located in the Witbank coal district, Mpumalanga and Natal Provinces, South Africa (“Operations Service Contracts“).
Oena is currently on care and maintenance and the Operations Service Contracts generate income within African Star based on coal throughput at each colliery. A nominee of African Star, Mr. Kevin Gallagher, will be appointed to Tango’s board of directors on closing. There are no underlying royalties in respect of Oena, however, each of the four private companies comprising African Star qualify as being “BEE Compliant”, namely, that they are in compliance with South Africa’s Black Economic Empowerment regimes.
Tango and African Star have agreed: (i) to restrict the number of Payment Shares tradable on any given day; and (ii) to impose a thirty-month escrow period, whereby ten percent of the Payment Shares shall be free trading (subject to a regulatory four month hold period) at closing, and subsequently thereafter, eighteen percent shall be released at each six-month interval over the 30 months. Contemporaneously, 17,150,000 of the Payment Shares shall be held in escrow pending receipt of applicable approvals under South African legislation. Lastly, in connection with the transaction, the Company has agreed to pay a cash finder’s fee of USD$100,000 to an arm’s length third party.
The transaction is subject to receipt of the approval of the TSX Venture Exchange.
Tango will also issue on closing a total of 1,474,522 common shares at a deemed price of $0.05 per share, payable as service fees to an arm’s length third party for consulting services rendered. The issuance of these shares are subject to the approval of the TSX Venture Exchange, and shall be restricted from trading for a period of four months from issuance.
About Tango Gold Mines Incorporated
Tango Gold Mines Incorporated is a Canadian company that holds a 100% interest in the 2,088.8 ha El Santo concession. El Santo is located in central Nicaragua south of B2Gold Corp.’s La Libertad mine and mill complex that is projected to produce approximately 143,000 to 150,000 ounces of gold in 2014. El Santo is believed to host several east-west trending, low sulphidation, epithermal quartz vein systems similar to those found on the La Libertad concession. Tango has filed an environmental impact assessment with respect to El Santo and continues to engage in discussions as it relates to Topacio.
