Rose Petroleum has granted Magellan Gold Corporation more time to gather the capital to snap-up Rose’s mineral processing mill operation in San Dieguito de Arriba, State of Nayarit, Mexico and its associated assets, licenses and agreements.
Magellan had paid Rose $100,000 for Magellan to secure a 60 day extension of its option to acquire the SDA Mill. During this period, both Rose and Magellan have made good progress working towards closing the transaction, according a spokesman.
Magellan was required to have deposited a minimum of $900,000 in an escrow account before the end of the option period. The total purchase price for the SDA Mill is agreed under the MOU as $1.5million, including the $100,000 paid by Magellan to date), payable as $1million in cash and $500,000 in restricted common stock (shares) in Magellan.
Also under the terms of the option extension, Magellan will pay Rose the ongoing operational costs, including employee and maintenance costs of the SDA mill, approximately $25,000 per month for August and September, with the August payment due by 4 August 2017. Magellan has also agreed to pay certain key employee costs incurred during the June and July option period, which will be paid on completion of the disposal.
However, the spokesman added: “Given the progress made with Magellan and the short period requested by Magellan to complete the financial obligation, Rose has now agreed a minor extension to the option period to 15 August 2017, to enable Magellan to complete its obligation.”
Rose chief executive Matthew Idiens said: “We are working closely with Magellan towards a successful completion of this transaction, hence agreeing to this minor extension to allow them to complete their financial obligation. We look forward to confirming the receipt of the irrevocable commitments from Magellan in due course.”
Should the transaction not complete due to it not being approved by the Company’s shareholders, Rose will reimburse Magellan the $100,000 that Magellan paid to Rose to secure its option extension. This payment would be payable in cash or shares at the company’s discretion.
Milling activity at the SDA mill is currently on hold pending the completion of this transaction.