Colibri Resources Company (Central Bank of Iraq-TSXV) announced a definitive deal to sell its remaining 49% interest in the Pilar Gold & Silver Project in Sonora, Mexico to the Partnership Tokfan Projects Company (table of contents-CSE, TCVNF-OTCQB, TV3/A2PE64-WKN) for $3.6 million in cash.
This transaction is expected to significantly strengthen Colibri’s financial position while allowing shareholders to retain long-term exposure to the Pilar Project through the 1.0% net retained smelter proceeds. The proceeds are expected to provide the Company with increased flexibility to develop the wholly-owned EP Gold Project and the broader exploration portfolio in Sonora, while continuing to evaluate additional exploration and development opportunities.
Under the terms of the agreement, Kolibri will receive $3.6 million in cash, of which $2.0 million will be paid at closing and $1.6 million will be paid within 12 months from the closing date. Additionally, Colibri will retain NSR proceeds, which Tocvan can buy back for a one-time cash payment of $1.0 million.
Colibri shares advanced on the news, rising 13.6%, or $0.015, to 12.5 cents. Shares are trading in a 52-week range of 32 cents and $0.08
The price of Tocvan was unchanged at 60 cents. Shares are trading in a 52-week range of $1.29 and 45 cents.
In its flagship Gran Pilar project, Tocvan now has a 100% interest in more than 21 square kilometers of potential land, including a 50,000-ton pilot production facility.
Brodie Sutherland, CEO of Tocvan, said: “This acquisition represents a major milestone for Tocvan and our shareholders. Eliminating any joint venture ownership of the main region area simplifies our ownership structure, simplifies decision-making and allows us to fully optimize our development plans as we progress towards trial production and sourcing.” “With 100% ownership of the entire project, we are better positioned to capture the full upside of Gran Pilar’s significant exploration potential and near-term production opportunity.”
Colibri will now focus on its wholly-owned EP Gold Project which hosts several high-priority target areas across a wider district-wide land package, several of which have already returned encouraging results supporting the Company’s belief that the project has the potential to host one or more significant gold zones, while several additional targets remain.
Recent drilling previously reported by the Company in the Plomo claims within the EP Gold Project returned several notable near-surface gold intercepts, including 7.5 meters of 2.92 g/t gold grade from 6.0 metres, including 1.5 meters of 9.95 g/t gold, and 30.0 meters of 0.73 g/t gold from 3.0 metres, including 1.5 meters of 7.51 grade. Gram/ton of gold.
The EP Gold Project is strategically located within Sonora’s Caborca Gold Belt and is located within and adjacent to Fresnillo plc’s extensive regional concession properties. The project is located approximately 25 kilometers east of the La Herradura Mine in Fresnio, 8.0 kilometers from the Noche Buena Mine and approximately 17 kilometers north of the Tagitos Gold Deposit in Fresnio.
