Organullo Project
Under the agreement, Aumin Argentina S.A.U. has been granted an option to acquire a 100% interest in the Organullo Gold Project by making US$4.0 million in staged cash payments to Latin Metals and completing up to 40,000 metres of drilling over a six-year period.
The transaction provides Latin Metals with multiple paths to retain long-term exposure through either an equity interest in Aumin Argentina or NSR royalty, with potential aggregate cash consideration of up to US$40 million under an accelerated acquisition and royalty buy-back scenario.
Partner-Funded Exploration
PARTNER-FUNDED EXPLORATION
Aumin Argentina S.A.U.
The Organullo agreement provides Latin Metals with the potential to receive up to US$40 million in aggregate cash consideration while retaining a minimum 1% NSR royalty, with up to 40,000 metres of exploration drilling funded by Aumin Argentina S.A.U.
Under the agreement, Aumin may acquire a 100% interest in the Organullo Project over a six-year period by completing 40,000 metres of drilling and making US$4.0 million in staged cash payments to Latin Metals.
Following exercise of the Option, and subject to the applicable listing provisions, Latin Metals may elect to receive either a 19.9% ownership interest in Aumin Argentina (or a Listed Vehicle as applicable), together with customary participation rights and board representation, or a 2% Election NSR royalty.
If Latin Metals reverts to a royalty, Aumin may purchase up to 1% for US$20 million, leaving Latin Metals with a 1% NSR royalty with no further buy-back right. Under this non-accelerated scenario, Latin Metals has the potential to receive up to US$24 million in aggregate cash consideration.
Aumin may also accelerate the acquisition after completing at least 15,000 metres of drilling by paying all remaining Option cash payments plus an additional US$16 million. Under the accelerated acquisition structure, Latin Metals retains a 2% Acceleration NSR royalty, of which up to 1% may be purchased for US$20 million, resulting in potential aggregate cash consideration of up to US$40 million, leaving Latin Metals with a 1% NSR royalty with no further buy-back right.
OPTION OBLIGATIONS FOR 100%
| Payment to Latin Metals (USD) | Cumulative Drilling (m) | |
|---|---|---|
| Within 10 days of Letter Agreement | $100,000 (paid) | — |
| Definitive Agreement or Confirmation Notice | $150,000 | — |
| Year 11 | $400,000 | 3,000 m |
| Year 2 | $450,000 | — |
| Year 3 | $500,000 | 15,000 m |
| Year 4 | $650,000 | — |
| Year 5 | $800,000 | — |
| Year 6 | $950,000 | 40,000 m |
| TOTAL | US$4.0M | 40,000 m |
(1) Following the Commencement Date, the 3,000-metre first year drill commitment and the US$400,000 first-year cash payment shall be irrevocable commitments
(2) If any or all of the 3,000m drill commitment remains undrilled, Aumin may pay cash-in-lieu of any shortfall payable to Latin Metals at rate of US$350 per undrilled metre
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