Canadian mining company, Stronghold Metals Inc. announced it has bought Mineracao Vale do Sonho Ltd, a Brazilian mining company, by buying all of its issued and outstanding quotas from the company’s quotaholders. This follows a May press release the Canadian miner had issued detailing the investment deal when it was first entered with the Brazilian company.
In exchange for the Brazilian Company’s quotas, the Canadian firm issued 1,500,000 common shares in its capital and 750,000 non transferrable share purchase warrants to Do Sonho Quotaholders with each warrant holder being entitled to acquire an additional common share in Stronghold’s capital at a price of $0.75 per common share till June 16th, 2012. However, the Canadian firm’s warrants issued to Do Sonho Qoutaholders are subject to a four month and one day hold period that will expire on October 17th, 2010.
Do Sonho is a privately owned Brazilian company that has mining rights to five mineral concessions and is currently in the process of being transferred title to an additional mineral concession. Cumulatively thus, the six concessions make up the Tucuma Property that consists of a total of 11,500 hectares and is found in the Brazilian state of Para.
The Canadian mining company is expected to pay US$3 million upon the launch of commercial primary ore production, minus alluvial minerals, from the Tucuma Property to Do Sonho Quotaholders on a pro rata basis to their quotaholdings in Do Sonho and further spare a 1% Net Smelter Return royalty to the Do Sonho Quotaholders on a pro rata basis. Stronghold Metals Inc. President and CEO, Yannis Tsitos, said the company was very excited to have concluded the deal for the purchase of the Brazilian Do Sonho investment.
According to him, historical, geophysical and geochemical data including historical scouting drilling results from the Tucuma Property indicate high quality gold and copper-gold targets exist untested or partly tested in the Do Sonho held concessions. The Canadian firm has already begun preparations for the expected drill program and said it would offer more details on the first phase of the planned drill soon.
Historically, the Tucuma Property has produced significant quantities of gold from small-scale mining by artisanal miners (garimpeiros). The Tucuma Property represents an excellent opportunity to explore for both shear-hosted economic gold vein mineralization and for a copper-gold system of the IOCG type, with drill ready targets. Part of the Tucuma Property has been previously explored by High-grade Ventures, Brasilca Mining, a Teck-Inco joint venture and Codelco.
June 19, 2010.