TORONTO, June 2, 2016 /CNW/ - Stroud Resources Ltd.
("Stroud" or the
"Company") (TSXV: SDR) is pleased to announce that it
has reached an agreement to sell its 100 percent interest in the
Company's Hislop project (the
"Property") to a private company, Hislop Gold Company Ltd.
("HGCL"), for $225,000 in cash
and $1,275,000 in assumption of debts
owed by Stroud to certain
debtholders (the "Transaction").
"We are pleased to have reached an agreement which we believe
significantly improves the Company's balance sheet and allows
Stroud to focus on developing its
silver-gold project in Jalisco,
Mexico," said Mirsad
Jakubovic, President of Stroud Resources Ltd. Following the
close of the Transaction, the Company intends to redeploy net
proceeds from the disposition to pay certain debts and advance its
Santo Domingo project.
The Transaction is expected to close on or about June 30, 2016 and is subject to obtaining various
TSX Venture Exchange, regulatory and other approvals and other
customary closing conditions. Upon completion of the Transaction,
Stroud will also retain a net
smelter royalty ("NSR") of 0.5% which can be purchased by
HGCL at for $1,000,000. There is no
break-up fee should the Transaction not close and the Company is
free to entertain superior offers in respect of the Property.
Two directors of HGCL, Mr. Mirsad
Jakubovic and Mr. Howard
Atkinson, are also directors of the Company. Accordingly,
the proposed Transaction is considered a "related party"
transaction pursuant to Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special
Transactions ("MI 61-101") and the polices of the TSX
Venture Exchange. Stroud is
relying on the exemptions available under sections 5.5(g) and
5.7(1)(e) of MI 61-101 from the formal valuation and minority
shareholder approval requirements, respectively. The Transaction
was approved by the independent members of the board of directors
of Stroud with Mr. Jakubovic and
Mr. Atkinson abstaining from participating in the vote. The Company
expects to file a material change report containing the prescribed
disclosure under MI 61-101 within 10 days of the date hereof in
order to provide for more than 21 days before the expected date of
the closing of the Transaction.
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.
SOURCE Stroud Resources Ltd.