Sunridge Gold Corp (CVE:SGC) and Sichuan Road & Bridge Mining Investment Development Corp (SRBM) completed the purchase and sale of Sunridge's 60% interest in the Asmara Mining Share Company (AMSC) on Tuesday.
Sunridge confirmed payments aggregating $68.6mln have been received or are in transit.
Sunridge detailed that $65mln by SRBM for the purchase price of the shares of AMSC, net of $3.3mln income tax withheld for the capital gain to the company and paid to the government of Eritrea.
Sunridge also said $6mln by SRBM as the first instalment of the remaining principal of the deferred payment of $13.33mln owed to the company by
Eritrean National Mining Corp. (ENAMCO).
The company also said that there was $950,982 of interest accrued on the deferred payment to closing by ENAMCO, net of $98,427 income tax withheld for the interest earned by the company and paid to the government of Eritrea.
The second and final instalment of the principal of $7.33mln of the deferred payment is secured by a bank guarantee and will be paid to Sunridge by October 26. ENAMCO will concurrently pay Sunridge interest on the second and final instalment of the deferred payment.
"This transaction marks the end of a very successful 11-year run for the Sunridge team in Eritrea," said Michael Hopley, president and chief executive officer.
"We have advanced the Asmara project from early-stage exploration, through a gamut of engineering and environmental studies, culminating in the issuance of a mining licence to AMSC to develop the Asmara project. During our time in Eritrea, the team forged a close working relationship with ENAMCO and made many friends in the country. We thank the Ministry of Energy and Mines as well as ENAMCO for their support over the years, and we certainly wish SRBM every success in the future with the Asmara project."
On January 22 the shareholders of Sunridge approved the distribution of the net proceeds of the sale of AMSC as a return on capital to the shareholders in two tranches after satisfying all the liabilities of the company followed by the dissolution of Sunridge.
The board will meet on April 29 to set the record date for the distribution, expected to be 14 calendar days from the meeting date, and to make application to the TSX Venture Exchange to have the company's shares delisted from trading not less than three days after the record date.
Sunridge intends to announce the record date and the timing of and the amount of net cash available to be distributed to shareholders on April 29. The first distribution will be made three business days after the record date.
The second distribution will be paid approximately six months later, after receipt of the final instalment of the deferred payment and all remaining obligations of the company have been settled. The company will then voluntarily dissolve.
The 60,774,558 share purchase warrants that are listed for trading on the exchange are subject to a warrant indenture. Any warrants that have not been exercised on or before the delisting date will be automatically cancelled, in consideration for the payment to the holders of such warrants of two cents per warrant. This payment will be paid to the warrantholders at the same time as the first distribution.
Sunridge shares were 1.49% higher at C$0.34.