Trading Symbol: TSXV: IG
CALGARY,
Feb. 20, 2013 /CNW/ - Infinito Gold
Ltd. ("Infinito Gold" or the "Company") announces that the TSX
Venture Exchange ("TSXV") has accepted for filing the asset
purchase agreement (the "Agreement"), which was previously
announced by the Company on January 28,
2013.
Under the terms of the Agreement, Zandor Capital
S.A. Colombia, (the "Purchaser"),
will acquire from the Company's wholly-owned indirect subsidiary in
Costa Rica, Industrias Infinito
S.A. ("IISA"), certain mine processing equipment ("Equipment")
located in Nicaragua for cash
consideration of USD $4,303,000 (the
"Purchase Price"). The Purchaser is an arm's length third party and
a wholly-owned indirect subsidiary of Gran Colombia Gold Corp.
The Equipment was originally purchased for use
at IISA's Crucitas gold project in Costa
Rica, but, as previously announced by the Company, a
November 2011 ruling by the Tribunal
Contencioso Administrativo (administrative court) in Costa Rica rescinded IISA's concession rights
and environmental approvals. As a result, the Company has been
unable to utilize the Equipment, and the sale of the Equipment will
fund the Company's working capital requirements while it is
reviewing its legal rights regarding Crucitas and strategic
alternatives going forward.
Under the terms of the Agreement, which includes
customary representations and warranties by the Company and the
Purchaser, the Purchase Price is payable in two equal installments,
with the first installment due on or before TSXV acceptance of the
transaction, which such payment is expected to be received by the
Company now that such TSXV acceptance has been received, with the
balance of the Purchase Price due on or before the earlier of the
date that is 90 days after such acceptance or the date by which the
majority of the equipment, by monetary value, is removed from its
current storage site. The Equipment is being sold on an "as is,
where is" basis with the Purchaser assuming all costs and
associated risks pertaining to the relocation of the Equipment.
The Company intends to use the Purchase Price to
fund certain restructuring costs, certain trade credit balances,
and the Company's ongoing working capital requirements as it
continues to evaluate its legal rights and strategic alternatives
going forward. To the extent that IISA may require equipment
similar to the Equipment for any future operations in Costa Rica, the Company expects to be able to
secure such equipment on commercially acceptable terms.
In conjunction with the TSXV's acceptance for
filing of the Agreement, TSXV has advised the Company that, upon
closing of the sale of the Equipment, the Company will no longer
meet the TSXV's Tier 1 continued listing requirements.
Consequently, the TSXV has advised the Company's tier
classification will change from Tier 1 to Tier 2 effective
February 21, 2013. This
reclassification will not result in any change to Infinito's
trading symbol, which will remain "IG". The reclassification is not
expected to have any material impact on the Company as it continues
to evaluate its legal rights and strategic alternatives going
forward.
Caution Regarding Forward-Looking Information
and Statements
Certain statements in this press release,
including the use of the Purchase Price and the Company's
evaluation of its legal rights and strategic options, address
future events and conditions and, as such, involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the statements. These statements are
made as of the date of this release but Company undertakes no
obligation to update these forward-looking information or
statements if circumstances or management's estimates or opinions
should change. The reader is cautioned not to place undue reliance
on forward-looking information or statements.
INFINITO GOLD LTD.
John
Morgan
President
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 release.
SOURCE Infinito Gold Ltd.