Hochschild Agrees To Buy Amarillo For C$0.40/Shr In Cash

Hochschild Mining PLC (HOC.L), on Tuesday, announced that it has entered into a definitive agreement to acquire all of the issued and outstanding shares of Amarillo Gold Corp. (AGC.V) at a price of C$0.40 per share in cash.

As per the deal, Hochschild will acquire a 100% interest in Amarillo's flagship Posse gold project located in Goiás State, Brazil. The company further noted that the cash offer represents a premium of about 66% to the 20-day volume weighted average price of Amarillo's common shares on the TSX Venture Exchange on 29 November 2021.

In addition, shareholders of Amarillo will receive shares in a newly formed company, Lavras Gold Corp., which will hold a stake in the Lavras do Sul project, C$10 million of cash, and a 2.0% net smelter revenue royalty on certain exploration properties owned by Amarillo and located outside the current Posse resource and mine plan at Amarillo's Mara Rosa property.

The net acquisition cost to Hochschild, including the Cash Offer, cash provided to Lavras Gold Corp. and Amarillo's net cash as at September 30, 2021, is estimated to be C$135 million.

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