Gold has identified several interesting oil and gas exploration and production opportunities in countries outside of Gold's core areas of Peru and Colombia. Gold has been looking at different ways of realizing value from these opportunities. In some of the non-core areas Irish companies have a good track record of closing deals compared to British ones and as an Irish registered company with its own financial resources and management, Minmet Plc should be in a unique position to exploit these opportunities. These areas, as well as opportunities outside of Central and South America that are presented to Gold, will be pursued by Minmet.
The agreement will enhance Gold's ability to acquire further non-core interests in the region and provide the finance to rapidly exploit those interests.
Under the agreement Gold will acquire 24.67 percent of Minmet through a share placing and a share exchange. Gold has also entered into a technical services agreement with Minmet to provide oil & gas technical expertise and has agreed to appoint two directors to the Minmet board.
Under the agreement:
Following these transactions Gold will hold a 24.67 percentage interest of the enlarged issued share capital of Minmet and Minmet will hold a 4.99 percentage of the enlarged issued share capital of Gold. Minmet and Gold have agreed to a mutual lock in of one year.
Gary Moore, Gold's Chief Executive, commented: "We have been looking for a suitable partner to develop these non-core opportunities for some time. Generally we would look to acquire exploration acreage and then, after a period of negotiation and evaluation, seek a partner who will take a significant portion of the risk and cost. It may not always be possible to get the partner of choice as a result of unique regional issues. Minmet is an Irish company with a significant portfolio of residual investments and increasing cash balances. The combination with Gold provides the opportunity to capitalize on a number of opportunities. With this tie-up with Minmet we now have a partner with cash and in which Gold has a significant involvement and we can avoid the dilution of a farm-out to another company."
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