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.
For further information: Mr. Mirsad Jakubovic, President, Stroud Resources Ltd., Tel: (416) 888-8731, [email protected], Stroud Resources Ltd.