UPDATE: Abzu Gold to Tentatively Sell 16.6 Million Units to Stonehouse Construction; Shares Dive 10%
Abzu Gold Ltd. (ABS.V) said it has signed a $2.5-million strategic investment proposal to sell 16,666,667 units at $0.15 per unit to Stonehouse Construction Pte Ltd.
Each unit will consist of one common share and one common share purchase warrant with each warrant exercisable into an additional common share for a period of 12 months at $0.20. Pursuant to the proposal the parties have agreed that SHC will assume operational management of Abzu's Nangodi project, which Abzu is earning an interest in under an option agreement with Kinross Gold.
Shares in Abzu are down 10.3% at 13 cents.
SHC will be entitled to appoint two directors to Abzu's board of directors. SHC will also have the right of first refusal on providing certain mining assets and services to Abzu on competitive market terms.
The proposal is subject to a six-week due diligence period during which time the parties will negotiate and finalize the formal agreements and Abzu will commence the process for shareholder and exchange approval.
Stonehouse Construction is headquarter in Kuala Lumpur and works in the minerals and oil&gas infrastructure sectors.
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