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Drill Turning at BTU Metals Hiewall Lake Targets at Flagship Dixie Halo Properties

VANCOUVER, BC / ACCESSWIRE / October 27, 2021 / BTU METALS CORP. ("BTU" or the "Company") (TSXV:BTU)(OTCQB:BTUMF) today announces that the drill is now…

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VANCOUVER, BC / ACCESSWIRE / October 27, 2021 / BTU METALS CORP. (“BTU” or the “Company”) (TSXV:BTU)(OTCQB:BTUMF) today announces that the drill is now turning on its first Hiewall Lake targets of the recently announced 2,200 metre drill program (October 18, 2021).

The targets relate to areas of noted and interpreted alteration and sulphide mineralization often associated with gold mineralization in the area. The drill program is scheduled to continue for the next several weeks and be complete by the Christmas break.

Bruce Durham, P. Geo., a qualified person as defined by National Instrument 43-101 has reviewed and approved the technical information in this press release.

ON BEHALF OF THE BOARD
Paul Wood

Paul Wood, CEO, Director
[email protected]

FOR FURTHER INFORMATION, PLEASE CONTACT:

Andreas Curkovic, Investor Relations
Telephone 1-416-577-9927
BTU Metals Corp.
Telephone: 1-604-683-3995
Toll Free: 1-888-945-4770

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

FORWARD-LOOKING STATEMENTS: This news release contains forward-looking statements, which relate to future events or future performance and reflect management’s current expectations and assumptions. Such forward-looking statements reflect management’s current beliefs and are based on assumptions made by and using information currently available to the Company. Investors are cautioned that these forward-looking statements are neither promises nor guarantees, and they are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances. All forward-looking statements made in this press release are qualified by these cautionary statements and by those made in our filings with SEDAR in Canada (available at WWW.SEDAR.COM).

SOURCE: BTU Metals Corp.

View source version on accesswire.com:
https://www.accesswire.com/669857/Drill-Turning-at-BTU-Metals-Hiewall-Lake-Targets-at-Flagship-Dixie-Halo-Properties




Today’s News

Monument Reports First Quarter Fiscal 2022 (“Q1 FY2022”) Results

Gross Revenue of $2.38 Million and Cash Cost of US$1,430/OzVANCOUVER, British Columbia, Nov. 29, 2021 (GLOBE NEWSWIRE) — Monument Mining Limited (TSX-V:…

Gross Revenue of $2.38 Million and Cash Cost of US$1,430/Oz

VANCOUVER, British Columbia, Nov. 29, 2021 (GLOBE NEWSWIRE) — Monument Mining Limited (TSX-V: MMY and FSE: D7Q1) “Monument” or the “Company” today announced its first quarter of fiscal 2022 production and financial results for the three months ended September 30, 2021. All amounts are expressed in United States dollars (“US$”) unless otherwise indicated (refer to www.sedar.com for full financial results).

President and CEO Cathy Zhai commented, “2022 fiscal year is full of challenge and would be rewarding for Monument when the Company stays focused on execution of the corporate strategies. During the quarter, the Selinsing flotation plant construction was kicked off with engineering design near completion, long lead items procured, and the earthworks at site reached 90% completion. The Phase 1 drilling at Murchison was completed by overcoming the shortage of drill rigs. Peranggih continued to provide additional mill feed that helped to sustain the cash flow. The Delays in gold production is anticipated to be caught up after the monsoon season in the third quarter.”

First Quarter Highlights:

  • Phase one drilling program completed in Q1 at Murchison Project with 91% assay results received to date;
  • Phase 1&2 RC drilling program completed at Peranggih Gold Prospect in Q1 with positive intercept results;
  • Selinsing Flotation Plant Project progressing on time in Q1 with 31% completion to date;
  • Long lead item contracts awarded to reputable suppliers for Selinsing Flotation Plant Project;
  • Selinsing Gold Mine production recovered gradually after the mining ban lifted due to Covid 19 Pandemic;
    • 1,423 ounces (“oz”) of gold sold for $2.38 million (Q1, FY 2021: 3,100oz for $5.92 million);
    • Average quarterly gold price realized at $1,829/oz (Q1, FY2021: $1,909/oz);
    • Cash cost per ounce sold was $1,430/oz (Q1, FY2021: $923/oz);
    • Gross margin decreased by 88% to $0.35 million (Q1, FY2021: $3.06 million);
    • 1,043oz of gold produced (Q1, FY2021: 3,504oz);
    • All-in sustaining cost (“AISC”) increased to $2,052/oz (Q1, FY2021: $1,055/oz).

First Quarter Production and Financial Highlights

    Three months ended September 30,
      2021   2020  
Production        
Ore mined (t*)     74,972   81,576  
Ore processed (t)     156,611   166,432  
Average mill feed grade (g/t*)     0.54   0.98  
Processing recovery rate (%)     65.0 % 63.6 %
Gold recovery (oz)     1,777   3,343  
Gold production (1) (oz)     1,043   3,504  
Gold sold (oz)     1,423   3,100  
         
Financial (expressed in thousands of US$)     $   $  
Revenue     2,383   5,919  
Gross margin from mining operations     348   3,059  
Income (loss) before other items     (755 ) 1,943  
Net income (loss)     (1,267 ) 138  
Cash flows provided from operations     23   747  
Working capital     44,532   18,482  
Earnings (loss) per share – basic and diluted (US$/share)     (0.00 ) 0.00  
*grams/tonne (“g/t”); tonnes (“t”)        
     
     
    Three months ended September 30,
      2021   2020  
         
Other     US$/oz   US$/oz  
Average realized gold price per ounce sold(2)     1,829   1,909  
         
Cash cost per ounce (3)        
Mining     522   274  
Processing     720   481  
Royalties     168   163  
Operations, net of silver recovery     20   5  
Total cash cost per ounce     1,430   923  
All-in sustaining costs per ounce (4)        
By-product silver recovery     1   1  
Operation expenses     34   9  
Corporate expenses     4   9  
Accretion of asset retirement obligation     22   11  
Exploration and evaluation expenditures     11   10  
Sustaining capital expenditures     551   92  
Total all-in sustaining costs per ounce     2,052   1,055  

(1)    Defined as good delivery gold bullion according to London Bullion Market Association (“LBMA”), net of gold doŕe in transit and refinery adjustment.
(2)    Monument realized 1,829US$/oz for the three months ended September 30, 2021 which excludes gold prepaid delivered of 723oz for comparison purposes.
(3)    Total cash cost per ounce includes production costs such as mining, processing, tailing facility maintenance and camp administration, royalties and operating costs such as storage, temporary mine production closure, community development cost and property fees, net of by-product credits. Cash cost excludes amortization, depletion, accretion expenses, idle production costs, capital costs, exploration costs and corporate administration costs. Readers should refer to section 15 “Non-GAAP Performance Measures”.
(4)    All-in sustaining cost per ounce includes total cash costs and adds sustaining capital expenditures, corporate administrative expenses for the Selinsing Gold Mine including share-based compensation, exploration and evaluation costs, and accretion of asset retirement obligations. Certain other cash expenditures, including tax payments and acquisition costs, are not included. Readers should refer to section 15 “Non-GAAP Performance Measures”.
     

Q1 2022 Production Analysis

  • Q1 2022 gold production was 1,043oz, a 70% decrease as compared to 3,504oz for Q1 2021. The decrease mainly resulted from a large quantity of super low-grade ore being fed into the mill although gold recovery was slightly higher.
  • Q1 2022 ore processed decreased to 156,611t from 166,432t for Q1 2021. The decreased mill feed was mainly due to less leachable sulphide ore and old tailings being fed into plant.
  • Average mill feed grade was 0.54g/t Au as compared to 0.98g/t Au of Q1 2021. Q1 2022 processing recovery rate increased to 65.0% from 63.6% for Q1 2021. The slight increase in processing recovery rate was mainly due to significant increase in Peranggih oxide materials being processed.
  • Q1 2022 cash cost per ounce increased by 55% to $1,430/oz from $923/oz for Q1 2021. This increase was primarily due to a significant reduction in the mill feed grade from 0.98g/t Au to 0.54g/t Au and significantly more low-grade leachable sulphide ore and low-grade Peranggih materials being processed.
  • Ore stockpile has reduced mainly due to adverse impact from the delay in blast permit issuance, rainfall in the first quarter and shortage of explosive supplies resulting in a lower mining rate that has yet to return to normal. The covid-19 pandemic has not helped in achieving the target. The Company has devoted its effort to improve the stockpile balance.

Q1 2022 Financial Analysis

  • Q1 2022 gold sales generated revenue was $2.38 million as compared to $5.92million from Q1 2021. Gold sales revenue was derived from the sale of 1,423oz (Q1 2021: 3,100oz) of gold at an average realized gold price of $1,829 per ounce (Q1 2021: $1,909 per ounce) and the delivery of 723 oz (Q1 2021: 723 oz at $1,625 per ounce gold equivalent) in fulfilling gold prepaid obligations.
  • Q1 2022 total production costs decreased by 29% to $2.04 million as compared to $2.86 million from Q1 2021. Cash cost per ounce increased by 55% to $1,430/oz as compared to $923/oz of the same period last year. The increase was attributable to a 45% decrease in the mill feed grade from 0.98g/t to 0.54g/t but an increase in recovery to 65.0% (Q1 2021: 63.6%) as a result of processing significantly more leachable sulphide ore and other low grade ores.
  • Gross margin for Q1 2022 was $0.35 million before operation expenses and non-cash amortization and accretion. That represented an 89% decrease as compared to $3.06 million from Q1 2021. The decrease in gross margin was attributable to significant lower-grade of ore fed, much lower volume of gold sold, and increased cash costs.
  • Net loss for Q1 2022 was $1.26 million, or ($0.00) per share as compared to net income of $0.14 million or $0.00 per share from Q1 2021. The net loss was mainly caused by lower operating margins.
  • Cash and cash equivalents balance as at September 30, 2021 was $35.57 million, a decrease of $3.05 million from the balance at June 30, 2021 of $38.62 million. As at September 30, 2021, the Company had positive working capital of $44.53 million as compared to that at June 30, 2021 of $48.54 million.

Development

Selinsing Gold Mine

At Selinsing the engineering, procurement, construction and project management (EPCM) progress has reached 31% completion for the flotation plant construction and mine development. 80% of the flotation design work was completed during the first quarter. Civil and structural drawings were completed subsequent to the quarter, and mechanical and piping drawings will be issued for construction by November 2021. All major contracts for long lead items were awarded to suppliers and 90% of the major equipment has been procured at the end of the quarter. Procurement for construction contractors are short listed and tender documents have been distributed.

Flotation construction includes earthworks, civil engineering, structural engineering, mechanical and electrical installation and other associated plant upgrades. Earthworks were initiated in April 2021 and are 90% completed to date. Civil foundation work is scheduled to start in January 2022 and expected to be completed by the end of April 2022.

The flotation pilot plant has been assembled and is successfully running at SGMM research and development laboratory. The pilot plant features a ball mill and classifier, rougher/scavenger flotation cells and three stages of cleaner flotation to replicate the flowsheet of the full-scale flotation plant. The pilot plant will be used for operator training, reagent trials, and for the preparation of concentrate samples for potential customers.

The Tailing Storage Facility (“TSF”) is under expansion to accommodate the new mine life. The construction to raise the current TSF to 540m RL continued during the quarter and is expected to be completed by March 1, 2022

Murchison Gold Project

Murchison Project development is put on hold. The existing processing plant is under care and maintenance and in good condition. It is ready for start-up production with installation of the refurbished plant.

Exploration Progress

Malaysia

At Peranggih the reverse circulation (“RC”) drilling campaign covering areas of Peranggih Central and South for 3,317m over 68 RC holes was initiated last fiscal year and was completed during the first quarter of fiscal 2022. It was done in two phases: Phase 1 was 34 drill holes for 1,697m and Phase 2 was 34 holes for 1,620m. All assay results for the 3,901 samples were received for analysis up to date, including assay results for 1,681 samples during the quarter ended September 30, 2021. The RC drilling is down 70m deep with space of 20m by 20m following steeply dipping high-grade mineralized structure. Overall, 70% of the designed holes hit gold mineralization above an oxide cut-off (>0.35 g/t Au Au) at relatively shallow depth, 50m below the surface. The results defined wider lower grade mineralization over an 830m long by 60m wide zone.

Western Australia

Fiscal year 2022 started with regional exploration at Murchison Gold Project. A 2-year exploration program and associated periodical rolling budget has been implemented to potentially add significant amount of additional resources to the current resource base. The aim is to establish Murchison as the company’s cornerstone gold project should the Murchison Project be potentially developed into a gold producing mine.

The Phase 1 drill program commenced on July 4th 2021 and was completed on August 21st 2021 at Burnakura. A total of 3,465m for 46 RC holes was finished for the Munro Bore Extension as well as the FLC2 and FLC3 prospects and a total of 10,484m for 349 aircore (“AC”) holes was completed with a focus on high quality structural targets including the Junction exploration target. A combined total of over 6,000 RC and AC samples were sent to ALS Geochemistry, Perth for analysis, of which 91% have been received up to November 2021, subsequent to the first quarter. The results will be announced as soon as the data is fully received and has been interpreted.

About Monument

Monument Mining Limited (TSX-V: MMY, FSE:D7Q1) is an established Canadian gold producer that owns and operates the Selinsing Gold Mine in Malaysia. Its experienced management team is committed to growth and is also advancing the Murchison Gold Projects comprising Burnakura, Gabanintha and Tuckanarra JV (20% interest) in the Murchison area of Western Australia. The Company employs approximately 200 people in both regions and is committed to the highest standards of environmental management, social responsibility, and health and safety for its employees and neighboring communities.

Cathy Zhai, President and CEO
Monument Mining Limited
Suite 1580 -1100 Melville Street
         Vancouver, BC V6E 4A6

FOR FURTHER INFORMATION visit the company web site at www.monumentmining.com or contact:

Richard Cushing, MMY Vancouver T: +1-604-638-1661 x102 [email protected]

“Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.”

Forward-Looking Statement

This news release includes statements containing forward-looking information about Monument, its business and future plans (“forward-looking statements”). Forward-looking statements are statements that involve expectations, plans, objectives or future events that are not historical facts and include the Company’s plans with respect to its mineral projects and the timing and results of proposed programs and events referred to in this news release. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. The forward-looking statements in this news release are subject to various risks, uncertainties and other factors that could cause actual results or achievements to differ materially from those expressed or implied by the forward-looking statements. These risks and certain other factors include, without limitation: risks related to general business, economic, competitive, geopolitical and social uncertainties; uncertainties regarding the results of current exploration activities; uncertainties in the progress and timing of development activities; foreign operations risks; other risks inherent in the mining industry and other risks described in the management discussion and analysis of the Company and the technical reports on the Company’s projects, all of which are available under the profile of the Company on SEDAR at www.sedar.com. Material factors and assumptions used to develop forward-looking statements in this news release include: expectations regarding the estimated cash cost per ounce of gold production and the estimated cash flows which may be generated from the operations, general economic factors and other factors that may be beyond the control of Monument; assumptions and expectations regarding the results of exploration on the Company’s projects; assumptions regarding the future price of gold of other minerals; the timing and amount of estimated future production; the expected timing and results of development and exploration activities; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; exchange rates; and all of the factors and assumptions described in the management discussion and analysis of the Company and the technical reports on the Company’s projects, all of which are available under the profile of the Company on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

 





monument mining limited

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Today’s News

Denarius Announces Third Quarter and First Nine Months 2021 Results

TORONTO, Nov. 29, 2021 (GLOBE NEWSWIRE) — Denarius Silver Corp. (“Denarius” or “the Company”) (TSXV: DSLV) announced today that it has filed…

TORONTO, Nov. 29, 2021 (GLOBE NEWSWIRE) — Denarius Silver Corp. (“Denarius” or “the Company”) (TSXV: DSLV) announced today that it has filed its unaudited interim condensed consolidated financial statements and accompanying management’s discussion and analysis (MD&A) for the three and nine months ended September 30, 2021. These documents can be found on its website at www.denariussilver.com and by reviewing its profile on SEDAR at www.sedar.com. All financial figures contained herein are expressed in U.S. dollars unless otherwise noted.

Third Quarter and First Nine Months 2021 Highlights

  • Denarius is a junior exploration company currently drilling its Lomero-Poyatos polymetallic deposit located on the Spanish side of the prolific copper rich Iberian Pyrite Belt. The Company also commenced drilling its Guia Antigua silver-gold project in Colombia in mid-2021 and IAMGOLD Corporation is carrying out an exploration program on the Company’s Zancudo Project in Colombia as part of an earn-in option agreement. Denarius is fully funded to carry out its current exploration campaigns with a cash balance at September 30, 2021 of $18.3 million.
  • Denarius was formed through a reverse take over transaction (“RTO Transaction”) in February 2021 and commenced trading on the TSX Venture Exchange (“TSXV”) under the symbol “DSLV” in March 2021. The Company currently has 207.4 million common shares issued and outstanding and has a strong shareholder base with approximately 27% owned by GCM Mining Corp. (formerly, Gran Colombia Gold Corp.) (TSX: GCM) and 19% owned by King Street Capital.
  • Initially, the Company focused on two silver-gold exploration projects, the Guia Antigua and Zancudo Projects, both of which are located in high-grade mining districts in Colombia. Concurrently with the closing of the RTO Transaction, 1255269 B.C. Ltd. (a party to the RTO Transaction and the “Guia Antigua Vendor”) completed a private placement financing and the gross proceeds of CA$8.4 million (approximately $6.7 million) were released from escrow to the Company. These funds are being used by Denarius to fund the exploration program at the Guia Antigua Project and for general corporate purposes.
  • In April 2021, the Company added its third project (the “Lomero Project”) with the acquisition of a 100% interest in the Investigation Permit Nº 14,977, also identified as Rubia, covering the areas occupied by the former Lomero-Poyatos Concessions and the mine within them in Southern Spain. The Lomero Project has a historical estimate in the inferred category of 20.93 Mt of 3.08 g/t gold, 62.38 g/t silver, 0.90% copper, 0.85% lead and 3.05% zinc that remains open at depth and along strike. In October 2021, the Company commenced a 23,500 meters drilling campaign at the Lomero Project.
  • In preparation for the Lomero Project acquisition and the planned exploration program, the Company completed a non-brokered private placement financing in March 2021 of 75,000,000 subscription receipts (the “Subscription Receipts Financing”) at a price of CA$0.45 per subscription receipt for aggregate gross cash proceeds of approximately CA$33.8 million (equivalent to approximately $26.9 million). The Subscription Receipts were converted into common shares and warrants on April 29, 2021. The warrants commenced trading on the TSXV under the symbol “DSLV.WT” in July 2021.
  • The Company reported a net loss for the third quarter of 2021 of $0.9 million, or $0.00 per share, compared with net loss of $Nil in the third quarter of 2020, principally reflecting general, administrative and marketing expenses incurred in the third quarter of 2021 as the Company ramps up its activities around its exploration projects. For the first nine months of 2021, the net loss amounted to $17.0 million, or $0.12 per share, compared with net loss of $Nil in the first nine months of 2020. The largest items included in the net loss in the first nine months of 2021 were the $12.9 million one-time charge related to the RTO Transaction in February 2021, $2.4 million of share-based compensation expense associated with stock options granted by the Company under its long-term incentive plan to directors, executive officers, management and consultants, and $1.5 million of general, administrative and marketing expenses.

Outlook

The Company is currently carrying out 23,500 m of drilling at the Lomero Project with an estimated cost of $4.0 million. The infill drilling program of 15,600 m has been designed to increase the confidence in the estimates to an Indicated Mineral Resources and to aid in the identification of different mineralization styles. The use of orientated core supplemented with televiewer information will increase the confidence in the structural controls on the project and geotechnical and hydrogeological modelling. The campaign will then proceed to conduct a 50×50 meters in-fill drilling program in the lower levels of the same mine. Initial results from the drilling program are expected toward the end of the year.

The Company is also continuing its drilling program at its Guia Antigua Project in Colombia. Assay results are pending from the initial in-fill drillholes and are expected to be announced before the end of the year.

About Denarius

Denarius is a Canadian-listed public company engaged in the acquisition, exploration, development and eventual operation of mining projects in high-grade districts, with its principal focus on the Lomero Project in Spain and the Guia Antigua Project in Colombia. The Company also owns the Zancudo Project in Colombia which is currently being explored by IAMGOLD Corp. pursuant to an option agreement for the exploration and potential purchase of an interest in the project.

Additional information on Denarius can be found on its website at www.denariussilver.com and by reviewing its profile on SEDAR at www.sedar.com.

Cautionary Statement on Forward-Looking Information

This news release contains “forward-looking information”, which may include, but is not limited to, statements with respect to exploration programs, funding and anticipated business plans or strategies. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Denarius to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption “Risk Factors” in the Company’s Filing Statement dated as of February 18, 2021 which is available for view on SEDAR at www.sedar.com. Forward-looking statements contained herein are made as of the date of this press release and Denarius disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management’s estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

For Further Information, Contact:

Mike Davies
Chief Financial Officer
(416) 360-4653
investors@denariussilver.com




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Today’s News

Amarillo to be acquired by Hochschild

TORONTO, Nov. 29, 2021 (GLOBE NEWSWIRE) — Amarillo Gold Corporation (“Amarillo” or the “Company”) (TSXV: AGC, OTCQB: AGCBF) has entered into…

TORONTO, Nov. 29, 2021 (GLOBE NEWSWIRE) — Amarillo Gold Corporation (“Amarillo” or the “Company”) (TSXV: AGC, OTCQB: AGCBF) has entered into an agreement (the “Arrangement Agreement”) with Hochschild Mining PLC (“Hochschild”), whereby Hochschild will acquire all of the outstanding shares of Amarillo by way of a plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). Pursuant to the Arrangement, each share of Amarillo will be exchanged for cash consideration of C$0.40 and one share of a new Brazil-focused exploration company, Lavras Gold Corp. (“Lavras SpinCo”), based in Toronto, Ontario.

Lavras SpinCo will be capitalized with C$10 million cash and will hold all assets and rights with respect the Lavras do Sul gold project (the “Lavras Project”) located in southern Brazil in the state of Rio Grande do Sul.

The cash consideration (not including the value of the Lavras SpinCo shares) represents a premium of 66% over the 20-trading day volume weighted average trading price of the Amarillo shares on the TSX Venture Exchange of C$0.24. The total transaction value is approximately C$164.5 million, excluding Lavras SpinCo’s asset value and C$10 million of cash. It is anticipated that Lavras SpinCo will complete a share consolidation immediately following the completion of the Arrangement.

Highlights of the proposed transactions:

  • Cash consideration of C$0.40 per Amarillo share;
  • Amarillo shareholders also receive one share of Lavras SpinCo for every Amarillo share held;
  • Lavras SpinCo will have C$10 million cash and will hold a stake of the Lavras Project assets; and
  • Lavras SpinCo will have a 2% net smelter return royalty over certain of Amarillo’s exploration properties located outside of the current Posse resource and mine plan at Amarillo’s Mara Rosa property.

“This acquisition delivers an immediate and compelling opportunity for our shareholders to monetize their investment in Amarillo at an attractive valuation and significant premium to the current and historical trading price of Amarillo’s shares,” said Mike Mutchler, President and Chief Executive Officer. “The transaction also provides our shareholders with additional value through their continued participation in the future exploration and advancement of the prospective Lavras Project through Lavras SpinCo, where our leadership team will be focussed on unlocking the true value of this project.”

BOARD APPROVAL AND RECOMMENDATION

Following an extensive review and detailed analysis of the proposed Arrangement and the recommendation of the special committee (the “Special Committee”) of the board of directors (the “Board”) of Amarillo, the Board has unanimously: (i) approved the Arrangement and the entering into of the Arrangement Agreement; (ii) determined that the Arrangement is in the best interests of Amarillo and is fair, from a financial point of view, to Amarillo’s shareholders, and (iii) determined to recommend that Amarillo’s shareholders vote in favour of the Arrangement.

Research Capital Corporation acted as advisor to the Special Committee and has provided its verbal fairness opinion (the “Fairness Opinion”) to the Special Committee and the Board that, as of the date of the Fairness Opinion, and subject to the limitations, qualifications and assumptions disclosed to the Special Committee and the Board in connection therewith, the consideration to be received by Amarillo’s shareholders pursuant to the transaction is fair, from a financial point of view to Amarillo’s shareholders. The full text of the written Fairness Opinion, which describes the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, will be included in Amarillo’s management information circular.

SHAREHOLDER APPROVAL

The Arrangement is subject to the approval of the Amarillo shareholders. A special meeting of the Amarillo shareholders is expected to be held in early 2022 to consider the Arrangement, with an information circular to be mailed to Amarillo shareholders prior to the meeting.

Directors and officers of Amarillo who collectively hold 6.51% of the outstanding shares of Amarillo have entered into voting and support agreements with Hochschild, supporting the Arrangement, pursuant to which they have agreed to vote their shares held in favour of the approval of the Arrangement at the meeting.

In addition, Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, and Baccarat Trade Investments Limited, which beneficially hold 68,300,000 and 76,099,500 shares (representing 17.69% and 19.71% of the outstanding shares), respectively, have also entered into similar voting and support agreements with Hochschild supporting the Arrangement.

CLOSING

Subject to the satisfaction of all of the conditions to closing set out in the Arrangement Agreement, it is anticipated that that the Arrangement will close in the first quarter of 2022. Conditions to closing under the Arrangement Agreement include, among other matters, receipt of all required regulatory and stock exchange approvals, receipt of required court approvals, receipt of approval from the shareholders of Amarillo and Hochschild and the absence of material adverse changes respecting Amarillo.

ARRANGEMENT AGREEMENT TERMS

The Arrangement Agreement contemplates a reciprocal expense reimbursement/non-completion fee of C$2.5 million payable if the required shareholder approval is not obtained or on the occurrence of certain other circumstances. In addition, the Arrangement Agreement provides for a termination fee of C$5 million payable by Amarillo to Hochschild in the event that the Arrangement is not completed or is terminated by Amarillo or Hochschild in certain circumstances, including if Amarillo enters into an agreement with respect to a superior proposal or if the Board, in certain circumstances, withdraws or modifies its recommendation with respect to the Arrangement. The Arrangement Agreement also provides for customary non-solicitation covenants, subject to customary “fiduciary out” provisions entitling Amarillo to consider and accept a superior proposal and a right in favor of Hochschild to match any superior proposal.

A copy of the Arrangement Agreement will be filed by Amarillo on SEDAR and will be reviewable under Amarillo’s profile at www.sedar.com.

STRATEGIC RATIONALE

The Arrangement is a culmination of Amarillo’s exploration and development successes in Brazil. Amarillo’s management views the Arrangement as an opportunity for its shareholders to realize value for a large portion of Amarillo’s assets, at an attractive premium to the recent market performance of its shares and other metrics, while continuing to participate directly in the upside of Lavras SpinCo’s planned exploration at the Lavras Project in Brazil. Lavras SpinCo is expected to be well-capitalized at inception with significant cash, no debt, and led by Amarillo’s current management team.

LAVRAS SPINCO

As part of the Arrangement, Lavras SpinCo will be capitalized with C$10 million in cash and Amarillo’s current interests in the Lavras Project. Lavras SpinCo’s vision is to be a leading independent exploration and production company in Brazil, maximizing shareholder value by bringing its disciplined exploration approach to the Lavras Project and other potential opportunities.

ADVISORS AND COUNSEL

Research Capital Corporation acted as advisor to the Special Committee and Amarillo engaged Osler, Hoskin & Harcourt LLP and Irwin Lowy LLP as its legal counsel in connection with the Transaction. Hochschild has engaged RBC Capital Markets as its financial advisor, sole sponsor and corporate broker, Stikeman Elliott LLP as its Canadian legal counsel, Pinheiro Neto Advogados as its Brazilian legal counsel, and Linklaters LLP as its UK legal counsel in connection with the Transaction.

WEBCAST

A webcast will be held at 10:00 a.m. Toronto time on November 30, 2021 for investors and analysts.

Register at: https://my.6ix.com/paColcfT

ABOUT AMARILLO

Amarillo is advancing two gold projects located near excellent infrastructure in mining-friendly states in Brazil. The development stage Posse Gold Project is on the Company’s Mara Rosa Property in Goiás State. It has a positive definitive feasibility study that shows it can be built into a profitable operation with low costs and a strong financial return. Mara Rosa also shows the potential for discovering additional near-surface deposits that will extend Posse’s mine life beyond its initial 10 years. The exploration stage Lavras do Sul Project in Rio Grande do Sul State has more than 23 prospects centered on historic gold workings.

Amarillo trades on the TSXV under the symbol AGC and the OTCQB under the symbol AGCBF. Visit www.amarillogold.com to learn more, and follow Amarillo on LinkedIn, Twitter, and YouTube.

CONTACT INFORMATION  
Mike Mutchler Annemarie Brissenden
President & CEO Investor Relations
416-294-0736 416-844-6284
[email protected] [email protected]

DISCLAIMER

Neither the TSX Venture Exchange nor its Regulation Services Provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the content of this news release.

FORWARD-LOOKING STATEMENTS AND CAUTIONARY LANGUAGE

Certain information provided in this news release constitutes forward‐ looking statements. Specifically, this press release contains forward‐looking statements relating to: (i) the anticipated timing of the Amarillo shareholder meeting to approve the Arrangement, (ii) the anticipated timing of the closing of the Arrangement, the exploration and development prospects of Lavras SpinCo, and (iv) planned exploration and development activities of Lavras SpinCo.

The forward‐looking statements are based on certain key expectations and assumptions. With respect to the anticipated timing of the Amarillo shareholder meeting, these include expectations and assumptions concerning the time required to convene the meeting and complete and mail the related information circular. With respect to the anticipated timing of the closing of the Arrangement, these include expectations and assumptions with respect to the timely receipt of all required court, shareholder and regulatory approvals and the satisfaction of all other conditions to the closing of the Arrangement. With respect to the remaining forward-looking statements, these include expectations and assumptions concerning the availability of capital, the success of future drilling and development activities, Lavras SpinCo’s contractual rights, prevailing commodity prices and economic conditions, the availability of labour and services, the ability to transport and market production, timing of completion of infrastructure and transportation projects, weather and access to drilling locations.

Although Amarillo believes that the expectations and assumptions on which the forward-looking statements are based are reasonable at the time of preparation, undue reliance should not be placed on the forward-looking statements as Amarillo can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. With respect to the timing of the completion of the Arrangement, these include risks that the required court, shareholder and regulatory approvals are not obtained on a timely basis, on terms acceptable to the parties or at all and risks that other conditions to the completion of the Arrangement are not satisfied. There is no guarantee that the Arrangement will close at the anticipated time or at all. With respect to the exploration and development prospects of Lavras SpinCo, the planned exploration and development activities of Lavras SpinCo and such factors and risks include, but are not limited to: general economic, market and business conditions; fluctuations in commodity prices; the test results and performance of exploration and development drilling, fluctuation in foreign currency exchange rates; the uncertainty of historic resource estimates and estimates of the value of undeveloped land; changes in environmental and other regulations; risks associated with mineral operations; and other factors, many of which are beyond the control of Amarillo. These and other risks are described further in Amarillo’s most recently filed management discussion and analysis and its annual information form for the year ended December 31, 2019, which have been filed on SEDAR and may be reviewed under Amarillo’s profile at www.sedar.com.

The forward-looking statements contained in this press release are made as of the date hereof. Except as may be required by applicable securities laws, Amarillo assumes no obligation to publicly update or revise any forward‐looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. The securities to be distributed pursuant to the Arrangement have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. The securities to be distributed pursuant to the Arrangement will be offered and sold in the United States pursuant to the exemption from registration set forth in Section 3(a)(10) of the U.S. Securities Act and similar exemptions under applicable state securities laws.

PDF available: http://ml.globenewswire.com/Resource/Download/a8a9b4e5-738b-4de3-a92f-9527c82db06c





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