Exploration group Ovoca Gold has conditionally agreed to buy 74 per cent of a company that owns a silver deposit in northeastern Russia as it strives to further expand exploration and tap rising silver prices.
The Irish company will acquire Ayax, a four-year-old Russian company that owns the Goltsovoye silver deposit in the district of Omsukchan. The deposit is estimated to be worth as much as $182.1 million (€148 million), based on a price of $12.50 per ounce of silver and $1,200 per tonne of lead. Silver closed at $12.89 in New York on Friday.
Ovoca will issue 110 million new shares of 2.5 cent apiece for the stake in Ayax, as well as $1 million in cash, if the principal Ayax shareholders are appointed to the board of Ovoca and directors from the Irish company are named to the board of Ayax.
When the acquisition of the 74 per cent interest in Ayax is completed, Ovoca will enter a conditional option agreement that gives it the right to buy the remainder at any time between the first and second anniversary of the acquisition completion date. Ovoca will exercise the option at 43 million new shares or for $5 million in cash if the market value of the option shares is less than $5 million when the option is exercised.
Ovoca earlier this year increased its stake in Norplat, a company that holds an exploration licence in northwest Russia, to 86 per cent.
