Breaking News

Tweet TWEET

Terraco Gold Announces 3rd Royalty Acquisition on the Spring Valley Gold Deposit, Nevada, and a Non-Dilutive US$1,000,000 Cash

Terraco Gold Announces 3rd Royalty Acquisition on the Spring Valley Gold 
Deposit, Nevada, and a Non-Dilutive US$1,000,000 Cash Infusion 
Highlights:  
-- Transaction increases royalty exposure on Barrick operated Spring
Valley Project 
-- Additional royalty option positions Terraco up to 3% NSR coverage
on the known Spring Valley gold deposit 
-- US$1,000,000 cash infusion with no dilution to shareholders 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/22/13 -- Terraco
Gold Corp. (TSX VENTURE:TEN) ("Terraco" or the "Company") is pleased
to announce that it has entered into a three-way transaction whereby
Terraco and its wholly owned Nevada subsidiary, TGC Holdings Ltd.,
("TGC" and together with Terraco, the "Terraco Parties") will receive
a US$1,000,000 non-dilutive cash infusion and an option to acquire a
net smelter returns royalty ("NSR") (described below) on part of the
Spring Valley gold project located in Pershing County, Nevada
("Spring Valley Project"). This is the third NSR transaction that
Terraco has entered into relating to the growing Spring Valley
Project, which is a joint venture between Barrick Gold Corp.
("Barrick") and Midway Gold Corp. ("Midway"). The Spring Valley
Project adjoins Terraco's 100% owned Moonlight Project that
encompasses over 35 square kilometers. 
"In conjunction with our first two NSR transactions on the Spring
Valley Project (December 2011 & March 2012), Terraco now has royalty
coverage, either by direct ownership or option, of up to 3% NSR on
this developing project. This is exciting for several reasons in that
we believe Barrick's continued work and development at Spring Valley
will add additional ounces of gold discovered beyond the current NI
43-101 mineral resource and that Terraco will enjoy significant cash
flow (from the 3% NSR) on those growing gold ounces when in
production. Terraco management believes that the valuation of a 3%
gold NSR on a Barrick led project will grow as the project moves
towards production. We are also excited, in these tough economic and
market times, to be able to deliver to shareholders a US$1.0 million
cash infusion without issuing a single share, thus no additional
shareholder dilution," stated Todd Hilditch, President and CEO of
Terraco. 
Transaction Terms  
Under the terms of the three-way transaction, the Terraco Parties
have: (i) entered into a royalty purchase agreement with the royalty
owner (the "Royalty Vendor") on certain claims on the Spring Valley
Project pursuant to which TGC will acquire 1/7ths of the sliding
scale NSR (the "Purchased NSR Interest") (see Note 1). The Purchased
NSR Interest represents a 1% NSR when gold prices exceed US$700 per
ounce and on production greater than 500,000 ounces of gold from the
claims covered by the Royalty Vendor's NSR on the Spring Valley
Project; and (ii) entered into a second royalty purchase agreement
with a third party investor (the "Strategic Investor") pursuant to
which the Terraco Parties will sell the Purchased NSR Interest to the
Strategic Investor and retain a 50% interest. Transaction details are
as follows: 


 
--  in consideration of the Purchased NSR Interest, Terraco will pay the
    Royalty Vendor US$4,200,000 and issue to the Royalty Vendor 800,000
    common shares. 
    
--  the Strategic Investor will fund the US$4,200,000 for Terraco to acquire
    the Purchased NSR Interest by buying the Purchased NSR Interest from
    Terraco for US$5,200,000 thus providing Terraco a US$1,000,000 cash
    infusion. 
    
--  the Terraco Parties will retain an option to acquire, for US$2,600,000,
    one-half of the Purchased NSR Interest (0.5% of the 1% NSR based on
    current gold prices) until December 30, 2016 or within 1 year of a
    change of control of Terraco or TGC. 

 
As part of the transaction, Terraco retains US$1,000,000 as a cash
infusion without the issuance of debt or common shares, or any other
mechanism, that would dilute or effect the Company's share structure.
The Company continues to maintain a debt-free balance sheet and on
closing of this transaction will have in excess of CDN$2,100,000 in
the treasury. 
Note 1: NSR Sliding Scale 


 
-------------------------------
Gold Price (per oz)         NSR
-------------------------------
less than $300               2%
-------------------------------
$300 - $399                  3%
-------------------------------
$400-$499                    4%
-------------------------------
$500-$599                    5%
-------------------------------
$600-$699                    6%
-------------------------------
$700+                        7%
-------------------------------

 
The transaction is subject to the acceptance of the TSX Venture
Exchange as well as certain other closing conditions.  
Terraco is a mineral exploration company listed on the TSX Venture
Exchange under the symbol "TEN". Please visit Terraco's website at
www.terracogold.com for additional information. 
Forward Looking Statements  
This news release contains forward looking statements. Although
Terraco believes that the expectations reflected in these forward
looking statements are reasonable, undue reliance should not be
placed on them because Terraco can give no assurance that they will
prove to be correct. Since forward looking statements address future
events and conditions, by their very nature, they involve inherent
risks and uncertainties. Additional information on these and other
factors that could affect Terraco's operations and financial results
are included in reports on file with Canadian securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com). 
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 
Contacts:
Terraco Gold Corp.
Todd Hilditch
President and CEO
(604) 443-3831 or Toll free: 1 (877) 792-6688
(604) 682-3860 (FAX)
www.terracogold.com
 
 
Press spacebar to pause and continue. Press esc to stop.