LONDON (ShareCast) - (Sharecast News) - Richland Resources has entered into a binding share purchase agreement with the shareholders of Global Asset Resources (GAR), it announced on Monday, for the conditional acquisition of GAR.
The AIM-traded firm said GAR holds a 51% interest in, and operatorship of, four gold exploration projects in North and South Carolina, adding that the proposed transaction would constitute a reverse takeover transaction under the AIM rules.

It said the four projects in the Carolinas were the Jones-Keystone Loflin Project, the Carolina Belle Project, the Jennings Pioneer Project, and the Argo Project.

The remaining 49% membership interest in each of the projects' special purpose vehicles was held by URI, which is a wholly-owned subsidiary of Carolina Gold Resources.

A payment would be made on completion to both the sellers and URI of AUD 60,000 (£33,250) in cash, and AUD 1.04m in new shares, to be issued at the price of its proposed placing, which was yet to be determined.

In addition, Richland said it would be required to make two non-refundable cash payments to GAR of $29,340 on 31 July, and $22,818 on 30 September, if completion had not occurred by then.

There was also potential further future payments to be made to the sellers and URI, in cash or new common shares at Richland's discretion, of AUD 1.5m and AUD 3m, depending on whether value-generative performance milestones are achieved, or certain vesting events occur within five years of completion.

Richland said the initial cash consideration and the enlarged group's planned initial two-year work programme and requisite working capital requirements would be funded by the issue of new equity, through a proposed placing to be conducted in the short-term.

It also said it was realigning its board with the appointments of Bernard Olivier and Melissa Sturgess, with immediate effect, who it said had "significant experience" of both the natural resources sector and certain key global capital markets.

Richland was also proposing a name change to Lexington Gold, to reflect the "transformational nature" of the proposed transaction, and was proposing a share capital consolidation to reduce the total number of common shares in issue on completion.

"We are delighted to have agreed this proposed transaction to acquire GAR which has majority interests in, and operatorship of, four promising gold exploration projects in North and South Carolina," said non-executive chairman Ed Nealon.

"We look forward to progressing this proposed transformational transaction to completion and thereafter pursuing our planned initial exploration programme to unlock the clear potential of the GAR projects against the prevailing strong market environment for gold.

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