As per the deal agreed by the parties, the transaction will complete after obtaining regulatory approval from TSX Venture Exchange and Red Mountain shareholders.
Before the completion of the deal, an initial restructure by Mindoro of the Philippines assets is expected to be completed before the end of September 2012.
As per the clauses of the deal, Red Mountain will issue to Mindoro 100,000,000 shares that will be held by Mindoro in escrow for 12 months and have full voting rights, after the completion of the deal, said the firm.
Apart from this, Red Mountain will issue to Mindoro 50,000,000 Performance Shares that will convert to full voting shares if RMX upgrades the Indicated Resource at Batangas to 600,000 oz of gold.
Under the terms of the deal, the 50,000,000 performance based Red Mountain shares may be distributed in-specie to Mindoro shareholders up to an additional 12 months from vesting (maximum of 24 months after completion).
After signing this share sale agreement Red Mountain will provide a loan draw-down facility to Mindoro, where Mindoro will start drill testing for potential high-grade "feeder zones" underneath and adjacent to the existing Resources at Archangel, Batangas Project.
Mindoro president and CEO Jon Dugdale said signing the gold assets share sale agreement and subsequently the loan facility with RMX means we can now commence drilling, targeting potential high-grade gold feeder zones at Batangas.
"We look forward to completing the transaction and, through our potential majority shareholding in RMX, growing the resource base and commencing a development scoping study at Batangas," Dugdale added.
