O2Gold Completes Acquisition of Colombian Gold Project

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TORONTO, April 23, 2021 (GLOBE NEWSWIRE) – O2Gold Inc. (“O2Gold” or the “Companies”) (TSXV: OTGO) is pleased to announce that the previously announced acquisition of a gold mining project in Colombia known as the“ Otu Central Project ”(the“ Otu Central Project ”) has been completed.Acquisition”). The Otu Central project consists of participations in 26 titles and applications for mining claims in the Segovia / Zaragoza regions in Antioquia in Colombia (together the “financial assets”). For more information on the acquisition, please see the company’s press releases dated October 28, 2020, November 30, 2020, and December 11, 2020, available on the company’s SEDAR profile at www.sedar.com.

Conditions of acquisition

In accordance with the provisions of the share purchase agreement dated October 26, 2020 as amendedShare purchase agreement”), Registered with Bullet Holding Corp. (“Bullet”) And in some of Bullet’s direct and indirect owned subsidiaries, the company acquired all of the issued and outstanding shares of Buenaventura Gold, Inc., a Panamanian company that indirectly owns 100% of the assets or was indirectly transferred irrevocably. Total consideration for the acquisition is $ 9 million (approximately $ 11.24 million) payable in cash and in Company securities, of which $ 1 million (approximately $ 1.25 million) in cash and 3 Million USD (approximately 3.75 million CAD). Of this, 18,807,206 shares of the company were issued at an assumed price per share of CAD 0.20. Under the share purchase agreement, each unit consists of the same securities that the Company issued in its private placement offering for units closed on April 16, 2021 (the “offer”). For more details on the offering, please refer to the company’s press releases dated January 14, 2021, March 22, 2021 and April 16, 2021, including information on the securities issued, which are also available at www.sedar.com.

The remaining $ 5 million (approximately $ 6.24 million) of consideration is payable by issuing:

  • on October 26, 2021, that number of common shares in the Company (the “Shares“) Corresponds to USD 2.5 million (approx. CAD 3.12 million) divided by the higher of: (i) the US dollar equivalent of the volume-weighted 30-day average price (“VWAP“) The shares on the TSX Venture Exchange (“TSXV”) For the period immediately prior to the date of issue of these shares and (ii) $ 0.18; and
  • On October 26, 2022, that number of shares was $ 2.5 million (approximately $ 3.12 million) divided by: (i) the US dollar equivalent of the 30-day VWAP of the shares in TSXV for the Period immediately prior to the date of issue of these Shares and (ii) $ 0.18.

In accordance with the guidelines of the TSXV, no more than 57,777,778 shares may be issued in consideration for the purchase.

In addition, Bullet will withhold a perpetual license fee of 2% on the smelting yield for the entire Otu Central project, with the exception of production from the No. 1 mining title. T4638005 which is already affected by a 5% net melt yield payable to a third party. Under the terms of the share purchase agreement, Bullet is entitled to nominate a person for election to the board of directors of O2Gold at its annual general meeting and to participate in future O2Gold private placement financings proportionally Basis for it to maintain its percentage ownership position as long as Bullet holds at least 10% of the issued and outstanding shares.

The assets are located in the Segovia / Zaragoza regions of Antioquia in Colombia and cover approximately 24,255 hectares. O2Gold acquired the assets together with the associated infrastructure debt-free. Bullet has agreed to contribute exploration skills and community relationships developed over several years of basic expansion.

The acquisition is a transaction at customary market conditions within the meaning of the guidelines of the TSXV. O2Gold does not pay any finder fees in connection with the acquisition.

Appointment of the director

Also in connection with the acquisition, the Company has appointed Mr. Robert W. Allen, a Bullet candidate, to the Company’s Board of Directors with immediate effect.

Robert W. Allen has been the founder and chairman of Grupo de Bullet, a mineral exploration company in Colombia since 1984, longer than any international mining company. Allen built and operated Continental Gold and its flagship deposit; Continental was sold to Zijin for CAD 1.4 billion in 2020. The Grupo de Bullet has discovered or contributed to the discovery of nearly every major Colombian deposit over the past two decades. Allen is from Arkansas, where he lives. Through the Grupo de Bullet, he remains one of the largest mineral rights holders in Colombia.

“We are very pleased to have Bob on the board. His vision and expertise are immeasurably beneficial to O2Gold Inc., ”said Jaime Lalinde, CEO of O2Gold. “He has had a tremendous impact on the Colombian precious metals industry and we expect that with his help we can continue the great and historic work that he and his nephew Robert Neill have done here. In addition, O2Gold intends to actively pursue the option of acquiring production and processing capacities in the region. “

Additional consideration

The company is also pleased to announce that in addition to the gross proceeds of $ 3,478,000 generated in the offering, $ 625,500 has been raised through the exercise of warrants by some of its warrant holders.

miscellaneous

Due to a typographical error by a finder, the company also announces that additional finder fees have been paid as per the offer as follows. An additional CAD 3,850 in cash and an additional 19,250 non-transferable Finder Warrants were paid (“Finder’s Warrants“) Issued to Haywood Securities Inc. in accordance with the guidelines of the TSXV. Each Finder’s Warrant entitles the holder to purchase one share at any time prior to April 16, 2023 at a price of $ 0.20.

All securities issued in connection with the offer are subject to a statutory holding period of four months and one day, which expires on August 17, 2021.

About O2Gold

O2Gold is a mineral exploration company with operations in Colombia.

For more information, please contact:

Jaime Lalinde, President and CEO
Phone: (57) 312 350 5864
Email: [email protected]

Cautionary Statement Regarding Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to, statements relating to the acquisition, including in connection with the Company’s future payment obligations, and the Company’s intention to pursue acquisitions of manufacturing and processing capabilities in Colombia. In general, forward-looking information can be identified by using forward-looking terminology such as “plans,” “expected,” “not expected,” “expected,” “budget,” “planned,” “estimates”. “Predicts,” “intends,” “anticipates,” or “does not anticipate” or “believes” or variations of such words and phrases, or states that certain actions, events or results “may,” “could,” “would,” “power “or” is taken “,” occurs “or” reached “. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results, level of activity, performance, or performance of the company to differ materially from those expressed or implied by such forward-looking information. While the company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that could cause results not to be as expected, estimated or intended . There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in these statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking information. The company undertakes no obligation to update any forward-looking information except in accordance with applicable securities laws.

Neither the TSX VENTURE EXCHANGE nor its regulatory services provider (as that term is defined in the policies of the TSX VENTURE EXCHANGE) has reviewed or assumed responsibility for the adequacy or accuracy of this publication.

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