Utah-based Gold Standard Inc. which is challenging American Barrick Resources’ (TSE) right to own the Mercur gold mine has announced a $2.25-million financing agreement with FCMI Financial Corp. of Toronto.
Under the terms of an agreement, FCMI, a Toronto-based financial services company, has agreed to buy one million Gold Standard shares at $2.25 per share.
FCMI Financial will also receive 7-year warrants to purchase 750,000 Gold Standard shares at $2.75 per share. Gold Standard will receive 5-year warrants to purchase 350,000 FCMI Class A shares at $4 per share.
Gold Standard says the two companies have agreed to a 2-year restriction on selling any shares covered under the financing arrangement, which also gives FCMI Financial certain refusal rights related to future Gold Standard financings.
While FCMI has read Gold Standard’s claim on the Mercur operation in Utah, Vice-president Henry Fenig said the company was more interested in Gold Standard’s exploration properties in Uruguay.
During 1987, Gold Standard acquired the right to explore and mine large tracts of land in southern Uruguay, within 100 miles of the capital city of Montevideo.
According to Gold Standard, the region is part of an Archaen shield containing the same type of greenstone belts currently being mined in Canada and Australia.
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