Mineros S.A. subsidiary purchases 50% interest in Luna Roja Project from Royal Road Minerals

On May 21, 2021, Hemco Nicaragua S.A., a wholly owned subsidiary of Mineros S.A., purchased a 50% interest in the Luna Roja Project, comprising the Monte Carmelo I and Monte Carmelo II mining concessions in Nicaragua, owned by Royal Road Minerals Limited. The Project had previously been jointly owned and operated by Royal Road Minerals and Hemco, pursuant to the terms of a strategic alliance agreement dated September 1, 2017 between the companies, as amended.

The purchase price paid by Mineros consisted of: (i) US$24,485,294 million, of which US$20,812,000 was paid in cash on the closing of the transaction and the remaining US$3,672,794 amount was retained by Hemco to be remitted to the applicable governmental authorities in accordance with applicable withholding tax requirements under Nicaraguan law, and (ii) a 1.25% net smelter return royalty on all future mineral production from the Monte Carmelo I and Monte Carmelo II mining concessions, commencing from the first commercial production therefrom.
 
Mineros also agreed to incur, during the five-year period ending May 21, 2026, not less than US$7.5 million in expenditures pursuant to exploration programs and budgets approved by a joint Hemco/Royal Road management committee pursuant to the Strategic Alliance Agreement.
 
France Tenaille and Ian Mitchell of Gowling WLG advised Mineros with respect to this acquisition.