Fidelity
Minerals
arranges
sale
of
the
Cerro Dorado
Gold Plant
for US $1,430,000
FIDELITY
MINERALS:
-
has
signed
a
binding
agreement
to sell its 100% owned Cerro Dorado Gold Plant for total
consideration of USD $1,430,000.
-
Completion
of the sale of
Cerro Dorado is staged
over
12 months and includes substantial
non-refundable capital
improvements by the Purchaser.
-
The
Company retains 100% ownership
of
Cerro Dorado until
all acquisition consideration is paid in
full.
-
Sale
of Cerro Dorado will allow Fidelity
Minerals
to
focus on its Strategic
Project Generator model, through which the Company has now acquired
a portfolio
of four high impact
gold
and copper projects.
Vancouver,
BC -- October
1st,
2019 --
InvestorsHub NewsWire -- Fidelity Minerals
Corp. (TSX-V: FMN
|
FSE: S5GM
|
SSE: MNYC)
("Fidelity
Minerals" or
"the
Company")
is
pleased to announce
it has
entered into a
binding
agreement with certain
private
Peruvian interests
("the
Purchasers"),
to immediately commence the final capital investments
required to
upgrade
and commission the
Cerro Dorado CIL plant in Arequipa, Peru.
The
transaction involves staged payments to Fidelity Minerals and
will conclude
with the final transfer
of the Cerro Dorado SAC
subsidiary to the
Purchaser,
at completion.
Cerro
Dorado SAC holds title to four mineral concessions, including the
Rey Salomon mine and the Cerro Dorado gold
plant.
The
binding agreement commits the Purchasers
to perform certain
capital improvements to the plant,
including the purchase and installation of a weigh-scale,
metallurgical and assay laboratory, tailings liner and
other
production related improvements, and to
make quarterly
payments to
Fidelity Minerals over
a
twelve
month
period.
The
total
Cerro Dorado cash
consideration
for the
sale of Cerro Dorado SAC is US$1,430,000,
with the
first
payment already
received by the
Company.
Certain
adjustments,
deductions and
disbursements will be made from the consideration
payments
to
clear local
accounts
payable and
entitlements, prior to the
assumption of operatorship
by the
Purchaser.
The
transfer of operatorship will occur
immediately,
with
the
Purchaser
appointing its own General Manager, who will be responsible for the
capital improvements, recommissioning and all future obligations of
Cerro Dorado SAC. Fidelity Minerals will continue to
monitor the capital
improvement programme and operations
of the
Cerro
Dorado mill complex, until the
transaction completes in 12 months.
In
the event the Purchaser
has missed
a
payment
and
this has not been
remedied within 15
days, the
ultimate transfer
of Cerro Dorado SAC to the Purchasers will not complete and
ownership of
the
mill complex, mine and concessions including all
improvements and on-property assets will
remain with Fidelity
Minerals.
Fidelity Minerals
has systematically evaluated potential
feedstock options for the Cerro Dorado mill since
2016.
Following
an objective
review
of the
toll
milling industry in
Peru,
the
board of Fidelity
Minerals,
supported by the Company's largest shareholder Lions Bay
Capital (TSX-V: LBI),
concluded that in light of the
significant working-capital requirement to recommission the mill,
that divesting Cerro
Dorado was ultimately in
the best interests of the Company.
This
transaction not only returns significant capital back to the
Company, but also removes a significant ongoing cost that has been
burdensome for the Company.
The
sale of Cerro Dorado will allow the Company to focus on its
Strategic Project Generator business model where it has
already
assembled a
portfolio of
high-quality mining
assets in Peru.
Within
the framework of this model the Company has already assembled a
portfolio of three 100% owned high impact gold and
copper exploration
properties and
a
44.5%
interest in
the
advanced-stage
Las Huaquillas
project,
where the Company has acquired 100% of
the
surrounding
Greater
Las Huaquillas
concessions.
The
Las Huaquillas
gold
project was previously subject to exploration drilling by
Sulliden
Exploration.
In
1998, Sulliden
estimated that
a 500m section
of the 2,200m long Los Socavones
Zone
at
the
Las
Huaquillas
project
hosts
an
historical
non-NI43-101
compliant geological resource
of 6.57Mt grading 2.12g/t Au and 25.2g/t Ag; equivalent
to 446,000oz
of gold
and 5,300,000
oz
of
silver at a 1g/t Au cut-off. The resource was
reported to remain open at depth and along strike. This historic
resource, based on 10 drill holes and 20 mineralized intercepts,
was estimated by Sulliden
to a
depth of only 200m. There has not been sufficient
drilling and/or
sufficient previous exploration at Las Huaquillas
upon
which to base a mineral resource or mineral reserve estimate
compliant to the standards of National Instrument
43-101.
The
Cerro Dorado transaction is
subject to TSX-V
approval and
a
finder's
fee
of
7.5% will be
paid to
a third party in staged tranches
proportional to the sale payments.
MANAGEMENT COMMENTARY
Director
& CEO
of
Fidelity Minerals,
Mr. Ian Graham commented:
"The
execution of a binding sale
agreement
for Cerro Dorado
both
capitalises the Cerro Dorado plant into near term
operations
and frees the Company to focus on advancing its other assets for
advancement and value creation".
Executive
Chairman of Fidelity Minerals,
Mr. Bahay Ozcakmak added:
"The
toll-milling industry, particularly at the small-scale end of the
market has been a difficult space.
After a concerted effort to integrate the mill with an owned
mineral
resource,
the board has taken the view that the risks and costs associated
with a Fidelity funded upgrade and recommissioning of Cerro
Dorado are
not
justified. On this basis, the transaction announced today removes a
significant ongoing cost for the company and provides the company
with material
net
proceeds to be able to advance the high-quality project portfolio
we have been able to assemble over
the last 12 months.
These new copper and gold projects are of a
scale
that is likely to attract
industry
interest. Indeed, Fidelity
has received
third-party interest in several
of
these projects already".
About
Fidelity Minerals
Corp.
Fidelity Minerals
Corp. is assembling a portfolio of high-quality mining assets in
Peru through the implementation of our Strategic
Project
Generator
(SPG)
model.
The project generator model involves the identification and
acquisition of appraisal stage opportunities with near-term
valuation catalysts, including potential for high-impact M&A.
The company is backed by an experienced management team
with diverse technical, market, and commercial expertise and is
supported by committed and sophisticated investors focused on
building long term value.
On
behalf of the Board of Fidelity Minerals;
Ian Graham
CEO and
Director
Tel:
+1.604.671.1353
Email:
igraham@fidelityminerals.com
Investor
Contact:
Bahay Ozcakmak
Executive
Chairman
Tel:
+61.3.9236.2800
Email:
bahay@fidelityminerals.com
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF
THIS NEWS RELEASE.
Disclaimer
& Forward-Looking
Statements:
This news release contains forward-looking statements.
Forward-looking statements are statements that relate to future
events or future financial performance. In some cases, you can
identify forward-looking statements by the use of terminology such
as "may", "should", "intend", "expect", "plan", "anticipate",
"believe", "estimate", "project", "predict", "potential", or
"continue" or the negative of these terms or other comparable
terminology. These statements speak only as of the date of this
news release. This news release may also contain inferences to
future oriented financial information ("FOFI") within the meaning
of applicable securities laws. The information in this news release
has been prepared by our management to provide a context for the
project acquisition and to provide the reader with an outlook for
our future activities and anticipated key projects and may not be
appropriate for other purposes.
Forward-looking statements in this announcement include, (but are
not limited to) advancing certain key project activities that could
represent important milestones which the Company expects may
represent material valuation catalysts, such as
the expectation that through
the Strategic Project Generator model Fidelity Minerals is
positioning itself to be a beneficiary in this environment of
increased appetite for prospective projects in this region.
Further, forward-looking statements in this release
include
that the
material net proceeds of the sale will enable the
Company to advance the rest of the high-quality project portfolio
we have been able to assemble over the last 12 months, and that
these new copper and gold projects are of scale that is likely to
attract industry interest and the implication that third-party
interest in a several of these projects may result in value
accretive transactions. The implication that the Company's
initiatives will individually
or collectively be successful
comprise forward looking statements.