On December 3, 2021, Salazar Resources Limited (TSXV: SRL) (OTCQB: SRLZF) (Frankfurt: CCG.F) announced that it had entered into a mining option and shareholders' agreement with Minera Mesaloma S.A. and other arm's length parties (collectively, the "Optionor"), and Santos Resources Ltd. ("Canco") pursuant to which Salazar Resources has the option (the "Option") to acquire, indirectly by way of the acquisition of shares of Canco, of up to 100% of the Los Santos gold project located in southwest Ecuador.
Pursuant to the Option, Salazar Resources can earn up to 100% of the property by paying the total sum of US$1,950,000 in instalments. In addition, Salazar Resources must pay, over the course of four years, additional sums totaling US$1,800,000 to the Optionor to exercise the Option to acquire a 90% participating interest in Canco.
On Salazar Resources having earned a 90% interest in the property, Salazar Resources has the option to purchase the remaining 10% of the property for US$2,000,000 plus a 1.5% NSR royalty, which is subject to a buy-back provision. Payments under each 0.5% NSR royalty shall be capped at US$4,500,000 when paid out from production. After Salazar Resources has taken the property to production, both Salazar Resources and the Optionor will thereafter fund the project on a pro-rata basis.
Gowling WLG advised Salazar Resources with respect to this agreement with a team co-led by France Tenaille and Brett Kagetsu, and which included Raymond Ong (securities) and Brent Kerr (tax).