VANCOUVER, Jan. 28, 2013 /PRNewswire/ - Goldgroup Mining Inc. ("Goldgroup") (TSX:GGA, OTC:GGAZF, BMV SIC:GGAN.MX) is pleased to announce that it has entered into a binding agreement with Oroco Resource Corp. ("Oroco") (TSXV:OCO, Frankfurt: 0R6) whereby Goldgroup will acquire 100% interest in Oroco's Cerro Prieto Project (the "Properties") in Sonora State, Mexico for an initial cash payment of US$4.5 million, US$1 million private placement of units in Oroco and up to an additional US$13.5 million in payments made from future gold produced at the Properties, subject to receipt of regulatory and Oroco shareholder approvals.
Cerro Prieto is a principally permitted, gold and silver project located in northern Sonora State, Mexico, with mineral concessions totaling an area of approximately 7,000 hectares, containing approximately 17.5 kilometers of strike length of the mineralized structure hosting the current resource. In early 2012 Oroco announced the receipt of the Environment Impact Statement (Manifestacion de Impacto Ambiental) and the Authorization of Change of Land Use (Estudio Tecnico Justificativo para Cambio de Uso de Suelo) for the Cerro Prieto project.
- On closing, Goldgroup will pay Oroco US$4.5 million in cash
- Goldgroup will subscribe for and purchase five million units in Oroco at a price of CDN$0.20 per unit by way of private placement, with each unit being comprised of one common share and one non-transferable share purchase warrant. Each warrant shall entitle Goldgroup to purchase one common share of Oroco for a period of two years for CDN$0.25
- Oroco will be entitled to receive up to an additional US$13.5 million through cash payments equal to US$150 for each of the first ninety thousand ounces of gold produced from the Properties paid quarterly and payments commencing no later than one year after closing of the transaction
- Goldgroup agrees to pay minimum payments of US$625,000 per quarter unless the Properties are not in production by January 1, 2014 in which case the first two minimum quarterly payments of 2014 will be US$250,000, the third minimum payment will be US$625,000 and the fourth payment will be the balance of US$2.5 million, less the three quarterly payments made
- Closing of the transaction is subject, but not limited to, the receipt of all required regulatory approvals as well as special resolution approval of Oroco shareholders
- Oroco will pay Goldgroup a break fee of US$500,000 if the transaction in not completed by June 30, 2013