St Augustine Gold and Copper (SAGC) has received approval by its Board and majority shareholders for the joint venture restructuring announced on October 15. Its partner, Nationwide Development Corp (Nadecor) has also received approval from its board and shareholders to proceed with the transaction.

The restructuring will transfer the amount allowable under Philippine mining law of Nadecor’s King-king Gold-Copper Project interest to a 39.96% equity interest in SAGC upon a successful transaction close.

“Simplifying the structure of the joint venture is beneficial for a number of reasons,” says SAGC CEO Andrew Russell. “Firstly, it fully aligns the interests of Nadecor, St Augustine and their respective shareholders in the project. Secondly, we believe the new structure increases the attractiveness of the project to potential strategic partners supportive of bringing King-king into production as soon as possible.”

The restructuring involves the arms-length joint venture partners combining their interests in the King-king project into one entity. The restructuring will result in Nadecor shareholders, other than SAGC, being issued 324,568,751 shares of SAGC representing 66.54% of the current issued and outstanding shares, and 39.96% of the issued and outstanding shares post transaction, assuming no further shares are issued.

The restructuring will result in SAGC holding a 100% interest in the joint venture milling company (Milling Co) as well as assuming full responsibility for organizing project financing. The structure of the JV mining company (Mining Co) will see Nadecor owning 60% and St Augustine owning 40% of the mining company, in accordance with the nationality requirements under Philippine law.

The relationship between the mining and milling companies will see Mining Co selling ore to Milling Co pursuant to an ore sales agreement, as defined under Philippine mining law. Milling Co would process the ore and subsequently sell copper concentrate, gold concentrate, cathode copper and gold bullion. St Augustine will continue to hold 25% of the issued and outstanding shares of Nadecor.

The King-king Copper-Gold Project is in Compostela Valley in the Philippines and is expected to recover 3.16 billion pounds of copper and 5.43 million ounces of gold over its 22 year mine life.
http://sagcmining.com

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