Mr. Guy Goulet reports
GENIUS PROPERTIES LTD.: ACQUISITION BY CERRO DE PASCO RESOURCES S.A. OF A 100% INTEREST IN EL METALURGISTA CONCESSION
On Jan. 12, 2018, Genius Properties Ltd. target Cerro de Pasco Resources S.A. exercised its option to acquire a 100-per-cent interest in the El Metalurgista concession located in Peru (where the so-called Quiulacocha tailings and Excelsior stockpile are located). Cerro de Pasco executed the public deed whereby it formally acquired title over the concession and paid its former titleholder, Victor Freundt Orihuela, the balance of the $853,700 (U.S.) purchase price. As a result, Cerro de Pasco is now the exclusive titleholder of the aforesaid concession, holding a 100-per-cent interest over it. Mr. Freundt retains the right to receive a 2-per-cent net smelter return (NSR) royalty on the products obtained from the concession. This royalty can be bought back entirely by Cerro de Pasco as of initiation of commercial production in the concession, by paying a consideration of $3-million (U.S.) if the royalty is bought back by the end of the second year, $3.5-million (U.S.) if bought back by the end of the third year or $4-million (U.S.) if bought back by the end of the fourth year.
Cerro de Pasco's title, which is now binding, will also become enforceable before third parties and the Peruvian government once the transfer contract is recorded with the Peruvian public registry, which is expected to be completed in the following few weeks.
As previously announced, pursuant to a merger agreement entered into on Nov. 9, 2017, between the corporation and Cerro de Pasco, the corporation intends to acquire Cerro de Pasco, a private Peruvian corporation, by merging Cerro de Pasco with a branch of Genius to be established under Peruvian laws, such that existing securityholders of Cerro de Pasco will become securityholders of Genius.
The proposed transaction is an arm's-length fundamental change of the corporation within the meaning of Policy 8, Fundamental Changes and Changes of Business, of the Canadian Securities Exchange, and is subject to a number of conditions precedent, including the receipt of all requisite regulatory, corporate and shareholder approvals, including that of the exchange.
The corporation and Cerro de Pasco continue to work toward the completion of a listing statement regarding the proposed transaction, as required pursuant to the policies of the exchange. The completion of the listing statement is a key component for the receipt of conditional approval for the proposed transaction from the exchange. Trading in the common shares of the corporation is expected to remain halted pending receipt of the exchange's conditional approval of the proposed transaction, which the corporation expects to receive in Q1 of 2018.
About Cerro de Pasco
Cerro de Pasco is a corporation incorporated under the laws of Peru. Since the above-mentioned option exercise, its main asset is a 100-per-cent interest in the El Metalurgista concession. Upon exercise of such option, Cerro de Pasco became the property's sole legal and beneficial owner. On Nov. 9, 2017, Genius completed a technical report regarding the property, prepared in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Project, and entitled "The Excelsior Property: The Excelsior Mineral Pile (EMP) and Quiulacocha Tailings (QT) associated with the Cerro de Pasco Mine, Cerro de Pasco District, Altiplano Region, North-Central Peru." The NI 43-101 report is available on the corporation profile on SEDAR.
About Genius Properties Ltd.
Genius is a Canadian mineral exploration company focused on developing projects with some of the world's most critical metals and minerals.
We seek Safe Harbor.
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