VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 11, 2012) - Scorpio Gold Corporation ("Scorpio Gold" or the "Company") (TSX VENTURE:SGN) announces that it signed a definitive asset purchase and sale agreement (the "Asset Purchase Agreement") with Royal Standard Minerals Inc. ("Royal Standard") yesterday to acquire (the "Acquisition") two mineral properties located in Nevada known as the Goldwedge and Pinon properties. The Asset Purchase Agreement replaces a non-binding letter of intent entered into by the Company and Royal Standard dated August 28, 2012, as amended, previously announced in the Company's news release dated August 29, 2012.
At the closing of the Acquisition, the Company will make a $1.25 million cash payment to Royal Standard (the "Cash Payment"), issue 3 million common shares in the capital of the Company to Royal Standard and assume approximately $16,000,000 of debt owing by Royal Standard to Waterton Global Value, L.P. ("Waterton").
Scorpio Gold is acquiring the properties through a sale process organized by a strategic committee of the Board of Directors of Royal Standard and Royal Standard's independent financial advisors. Scorpio Gold is pleased to have been the successful purchaser in this process and would like to thank the Board of Directors of Royal Standard for their professionalism, hard work and their commitment to completing this deal.
The Company has advanced a secured refundable deposit to Royal Standard in the aggregate amount of $350,000 in connection with the Acquisition and will continue to advance Royal Standard further refundable deposits of $100,000 per month until closing (collectively, with the existing $350,000 deposit, the "Cash Advances"). The Cash Advances will be credited against the Cash Payment on closing.
Pursuant to the Asset Purchase Agreement, closing of the Acquisition is subject to the fulfilment or waiver of a number of conditions precedent, including, but not limited to, Waterton consenting to the Acquisition and the assumption of debt on terms acceptable to Scorpio Gold, the approval of Royal Standard's shareholders and all required regulatory approvals, including the approval of the TSX Venture Exchange.
For additional information please see the Company's website at www.scorpiogold.com.
ON BEHALF OF THE BOARD
SCORPIO GOLD CORPORATION
Peter J. Hawley, CEO
This news release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur, and include, without limitation, statements regarding the Company's plans with respect to the completion of the Acquisition. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements, including the risk that Scorpio Gold will not be satisfied with its due diligence review of property matters and will terminate the Acquisition, or that either party will not be able to meet any of the other conditions precedent to the completion of the Acquisition, including, but not limited to, Waterton consenting to the Acquisition and Scorpio Gold's assumption, on terms acceptable to Scorpio Gold, of Royal Standard's outstanding debt and royalty obligations owing to Waterton; the approval of Royal Standard's shareholders; and all required regulatory approvals. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
Neither 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.