Vancouver-headquartered New Pacific Metals Corp. (TSX-V:NUX) plans to sell its main gold project in China for $30.5 million.
New Pacific’s subsidiary will transfer its 100% stake in Jin Chang Jiang Mining Co. Ltd. to the PGC Group Co. Ltd., a Chinese-government controlled enterprise based in Shandong province. PGC had sales revenue of about $150 million last year with $339 million in assets.
According to the deal, PGC will purchase an initial 60% stake of Jin Chang for $15.25 million with payments made in three installments. The first payment of $3.05 million will be made within five business days after signing the agreement. The second payment of $4.575 million will be made within 25 business days after due diligence documents are provided to PGC. The third payment of $7.625 million will be paid once the transfer of ownership is official after the Chinese government issues a new business license.
The PGC group will purchase the remaining 40% for $15.25 million within 24 months of the signing of the sales agreement, paid with shares of a subsidiary of PGC group, or in cash if an IPO of a PGC subsidiary falls through.
New Pacific’s Jin Chang subsidiary is developing the Huaiji gold project located 180 kilometres northwest of Guangzhou, the capital of Guangdong province in southern China. It has an inferred resource of 162,396 ounces of gold.
New Pacific’s share price range during the past week: between $0.84 and $0.90; 52-week high: $1.10; 52-week low: $0.60.