Solitario Resources (SLR-T) has signed a letter of intent with TNR Resources (TNR-V) to transfer ownership of mineral properties in Argentina in return for shares.
Having made a non-refundable binding payment of $65,000, TNR has agreed to purchase all of the shares of Solitario’s wholly owned subsidiary, Minero Solitario de Argentina (CMSA) for $500,000. Solitario will, in turn, invest that money in TNR by way of a private placement for no fewer than 1 million units.
Each unit consists of one share and a half-share purchase warrant enabling the holder to purchase a share at 50cents in the first year and 58cents in the second year.
In a related event, TNR recently effected a five-for-one share consolidation, bringing the number of outstanding shares to about 4 million.
The company also changed its name from Toscana Resources, but left its stock symbol unchanged.
The transaction was made conditional on TNR completing a financing that would bring the number of its outstanding shares to between 6 and 7 million.
The deal was to close March 31.
Solitario should wind up with between 15 and 20% of TNR’s shares, said Solitario President Christopher Herald. Solitario would also be entitled to make one appointment to TNR’s board.
CMSA controls 650,000 acres on 20 properties in west-central Argentina. The most advanced of these is the Canada Onda gold project in San Luis province.
Solitario has already completed 25 holes at Canada Onda, six of which encountered gold values greater than 1 oz. per ton over 6 ft.
CMSA also holds the Cateo 47 project, in which Battle Mountain Gold (bmg-n) is earning a 100% interest. CMSA retains a 2% net smelter return royalty, as well as a back-in right to 30% before a production decision is made.
In early March, Battle Mountain began a drilling program of about 20 holes on the copper-gold porphyry target.
CMSA’s other notable projects include the Cerro Negro copper-gold porphyry target and the Carachas polymetallic project, both of which are nearing the drilling stage. TNR also controls over 107,000 acres of mineral leases in Guyana.
Solitario expects to net US$750,000 from the sale of CMSA, allowing it to focus its financial resources on Peru. “We felt we were neglecting these (CMSA) properties and TNR was looking for properties in Argentina,” Herald said.
As a result of the transaction, Solitario will take a US$3.8-million non-cash writedown against its earnings.
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