Labrador Gold Corp. (LabGold or the Company) has announced the signing of a property purchase agreement (Definitive Agreement) with New Found Gold Corp. (NFG). Under this agreement, NFG will purchase a 100 % interest in the Kingsway Project, including all associated property and mining rights, for 20,000,000 CAD (the Purchase Price).
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This amount of money will be paid to LabGold upon delivery of the number of NFG Common Shares (Consideration Shares), which will be determined by dividing the Purchase Price by the NFG Common Shares’ closing price on the TSX Venture Exchange (TSXV). A resale restriction of four months and one day will apply to the Consideration Shares following the closing of the Transaction.
The LabGold team has worked hard over the last four years to generate and test targets along the prospective Appleton Fault Zone. This work resulted in the discovery of seven gold occurrences from the nine targets drill tested, a 78% success rate.
Roger Moss, President and Chief Executive Officer, Labrador Gold Corp.
Moss added, “As shown in the recently completed NI43-101 Technical Report, several untested targets remain on the property, in addition to potential extensions of many of the gold occurrences. However, we understand the significant amount of drilling required to make these discoveries and we are happy that New Found Gold is proposing to take up the challenge at Kingsway. We believe that their experience at Queensway to the south will be critical as they explore the Kingsway Project and demonstrate the true potential of the district.”
The unanimous recommendation of LabGold’s board of directors is that LabGold’s shareholders approve the transaction. The LabGold directors and officers have entered into voting and support agreements with NFG, whereby they have committed to voting their shares in favor of the Transaction, among other things.
Expected to close in the third quarter of 2024, the transaction is subject to customary conditions, such as obtaining required regulatory and stock exchange approvals and receiving approval from 66 2/3 % of LabGold shareholders voting in the company’s upcoming annual general and special meeting, which is scheduled for early July 2024.
The Definitive Agreement has standard clauses for deal protection. LabGold has pledged not to approach or start a conversation about any other merger or acquisition. LabGold shall pay NFG a termination fee of $500,000 if LabGold lawfully terminates the Definitive Agreement to accept a Superior Proposal (as defined in the Definitive Agreement).
Source: https://labradorgold.com/