Eldorado Gold Corp. reached an agreement to sell its Tocantinzinho Project (TZ), located in Brazil, to G Mining Ventures Corp. (GMIN). Eldorado will receive a minimum upfront consideration of US$50 million, comprised of a minimum US$20 million in cash and 19.9% of GMIN shares upon closing of the transaction. Eldorado would also receive a deferred consideration of US$60 million in cash, payable on the first anniversary of TZ’s commercial production.

GMIN has the option to further defer 50% of the deferred consideration at a cost of US$5 million, in which case US$30 million is payable upon the first anniversary of the commencement of commercial production and US$35 million is payable upon the second anniversary of commercial production.

“This transaction provides Eldorado with immediate value for TZ, while also retaining meaningful exposure to future value creation through our equity stake in GMIN,” Eldorado President and CEO George Burns said. “TZ will be a cornerstone asset for GMIN, a team with a strong track record of building mines on time and on budget. Together with our local Brazilian team, we believe they are the right group to responsibly advance the asset.”

Upon closing of the transaction, Eldorado and GMIN will enter into an investor rights agreement, which will grant Eldorado certain rights for so long as it maintains 10% ownership of GMIN common shares on an undiluted basis. The investor rights agreement will include a customary lockup period until the earlier of two years, and GMIN making a positive construction decision on TZ, the right for Eldorado to participate in future equity offerings by GMIN to maintain the greater of 19.9% of GMIN’s share capital, and Eldorado’s pro rata ownership interest prior to the offering, and additional customary rights and restrictions for a transaction of this nature.

The transaction, which is expected to close in the fourth quarter of 2021, is subject to customary closing conditions, including required regulatory approvals.