Friday, July 2, 2010

Azteca Gold (VAN:AZG) Acquiring Remaining Stake in Two Mile Property Venture

Azteca Gold (VAN:AZG) (PK:AZGFF) said it has agreed to acquire the rest of the 50 percent stake in the Two Mile Property joint venture it has with Silver Royal Apex.

Terms of the deal will be for $6.1 million in stock.

To pay for the acquisition Azteca said they're going to issue 128 million in restricted common shares to Silver Royal Apex. Those shares won't be allowed to be traded until four months after the deal is closed.

Azteca Chief Executive Matthew Russell gave the reasons for the acquisition as this, "Challenging market conditions and other factors prevented SRA from meeting its financial obligations under the joint-venture, despite several extensions of time, as well as an agreed-upon slower exploration program."

Azteca has also settle outstanding debt it has with drill contractor Ruen Drilling, for $3.03 million.

With the upcoming equity offering Azteca will pay Ruen $1.63 million over an eight-week period, and what is owed after that will be paid at an annual 6 percent finance charge.

Per the terms of the settlement, Ruen will start drilling at the Two Mile Project site the week of July 12 .

Azteca also said they've acquired another 15 unpatented mining claims, this time from Shoshone Silver/Gold Mining Company, which brings their total on the Two Mile Property project to 725 unpatented mining claims.

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