Grafton Resources Inc. (CSE:GFT; OTCQB: GFTFF) announced Wednesday the signing of a non-binding letter of intent (LOI) with Newmont USA Limited to acquire two gold-focused exploration projects in Chile. The proposed acquisition aligns with Grafton's strategy of building a district-scale position in prospective mineral belts within the country, according to the company.
The company, which already holds a land position in the region, believes the projects offer attractive geological characteristics and potential operational and exploration synergies with nearby properties. Management views the broader district as highly prospective and expects the consolidation of strategically located concessions to enhance future exploration planning and regional-scale targeting.
Under the LOI, the parties will negotiate a definitive agreement subject to satisfactory tax, corporate and securities law advice. Completion of the acquisition depends on due diligence, execution of definitive documentation, and regulatory approvals, including from the Canadian Securities Exchange. The LOI is non-binding except for customary provisions, and there is no guarantee a final deal will be reached.
Campbell Smyth, Grafton's CEO, said in a statement: “We are very pleased to have reached this stage. The Proposed Acquisition aligns with Grafton’s strategy of building a strong district-scale position in prospective mineral belts within Chile. We believe the Projects may offer compelling geological and operational synergies with our existing land holdings, and we look forward to advancing discussions toward a Definitive Agreement.”
Newmont, a major gold producer, is considered an arm's-length party to Grafton. The acquisition would further strengthen Grafton's exploration portfolio in Chile, which is already a key focus for the company. Grafton is a Canadian exploration company listed on the CSE, focused on discovering and developing mineral assets in the Americas.
The announcement is significant for Grafton as it seeks to expand its footprint in Chile, a country known for its rich mineral resources. The potential acquisition could position the company for more extensive exploration activities and potentially increase its resource base. However, the deal remains subject to several conditions, and forward-looking statements caution that actual results may differ materially from expectations.
For more information on the company and the risks involved, investors are advised to review Grafton's filings available at www.sedarplus.ca.
