01:12 PM EDT, 09/05/2017 (MT Newswires) -- GoGold Resources Inc. (GGD.TO) has entered into definitive agreements with Agnico Eagle Mines (AEM.TO) to sell its interest in the Santa Gertrudis gold project in Sonora, Mexico.

GoGold will receive total cash consideration of US$80 million (less a working capital adjustment estimated to be approximately US$280,000 at closing of the transaction) and will be granted a 2% NSR on the Project. Agnico will retain the option to buy back 1% of the NSR for US$7.5 million. Following announcement of the Transaction and the satisfaction by GoGold of certain conditions precedent, Agnico will advance to GoGold US$7.5 million in cash via a subordinated secured term loan bearing interest at 10% per annum. The term loan, along with accrued and capitalized interest, shall be repaid upon closing of the Transaction by way of a set off against the total cash consideration.

Brad Langille, President and CEO of GoGold stated, "We are very pleased to announce this Transaction with Agnico Eagle. We believe it demonstrates the value generated and progress made at Santa Gertrudis by the GoGold team since acquiring the Project in 2014. Agnico Eagle has a strong track record of advancing and developing projects and we believe GoGold shareholders are well positioned to benefit from the future potential of the Project through our retained royalty. The Transaction will enable GoGold to significantly strengthen the Company's balance sheet through repayment of our senior revolving credit facility, position the Company well as the Parral Tailings project ramps up to its full potential, while also allowing us to continue to pursue further opportunities in Mexico and beyond."

The net proceeds of the Transaction will be used to repay the Company's senior revolving credit facility, reduce outstanding trade and other payables and for working capital purposes. Completion of the Transaction is subject to satisfactory completion by Agnico of due diligence in respect of Santa Gertrudis and customary closing conditions including the receipt of Mexican anti-trust approval. The Transaction is not subject to a shareholder vote and is expected to close in the fourth calendar quarter of 2017.

Price: 0.60, Change: +0.08, Percent Change: +15.4