Pinecrest Resources and Sandstorm Gold Sign Strategic Alliance, Increase Private Placement
Pinecrest Resources Ltd. and Sandstorm Gold Ltd. have signed a letter of intent for a strategic alliance concerning the Enchi gold property in Ghana. Pinecrest is also increasing its non-brokered private placement to $3.6 million.
Vancouver, British Columbia – Pinecrest Resources Ltd. has entered into a non-binding letter of intent with Sandstorm Gold Ltd. to form a strategic alliance focused on the Enchi gold property located in Ghana, West Africa. Under the proposed alliance, Sandstorm Gold will subscribe for C$2 million in Pinecrest's private placement, which is expected to result in Sandstorm holding approximately 18% of Pinecrest's post-consolidation shares. Concurrently, Pinecrest is increasing its previously announced non-brokered private placement to up to C$3.6 million.
The terms of the strategic alliance include a right of first refusal for Sandstorm Gold on any future metal stream financing sought by Pinecrest for the Enchi Project. Sandstorm Gold will also have the right to buy back 50% of a 2% net smelter return royalty (NSR) held by Red Back Mining Ghana Limited on production from the Enchi Project for US$3.5 million. The transaction's completion is contingent upon several conditions, including the execution of definitive agreements and Pinecrest's indirect acquisition of the Enchi gold property, currently held through joint venture partners including a subsidiary of Kinross Gold Corporation and Edgewater Exploration Ltd.
Pinecrest Resources has expanded its private placement to up to 18 million units, aiming to raise a gross total of C$3.6 million. Each unit consists of one common share and one warrant, exercisable at C$0.30 for 24 months. The company intends to use the net proceeds, after transaction costs, to advance the Enchi Project. This includes a C$550,000 Phase 1 work program, comprising metallurgical testing, a preliminary economic assessment, and a geotechnical assessment.
All contemplated transactions and investments are subject to satisfactory due diligence, regulatory and stock exchange approvals, and other customary closing conditions. There can be no assurance that the transactions will be completed as proposed or at all, and they are subject to change during negotiations. The company has previously announced plans for a share consolidation and listing.