Cirrus Executes Definitive Agreement to Consolidate Lordsburg Porphyry Copper Mining District in New Mexico
Cirrus Executes Definitive Agreement to
Consolidate Lordsburg Porphyry Copper
Mining District in New Mexico
Vancouver, British Columbia--(Newsfile Corp. - May 26, 2022) - Cirrus Gold Corp. (CSE: CI) ("
Cirrus
"
or the "
Company
") is pleased to announce that further to its news release dated January 13, 2022 (the
"
Previous News Release
"), it has entered into a definitive asset purchase agreement (the "
APA
") with
Pyramid Peak Mining, LLC ("
PPM
"), a wholly owned subsidiary of Waterton Precious Metals Fund II
Cayman, LP ("
Waterton
"), and Mason Resources (US) Inc., a wholly owned subsidiary of Hudbay
Minerals Inc. ("
Mason
", and collectively with PPM, the "
Vendors
") to acquire the Lordsburg Property in
New Mexico (the "
Acquisition
").
The Acquisition will result in a 'fundamental change of business' of
Cirrus in accordance with the policies of the Canadian Securities Exchange (the "
CSE
").
In connection with the closing of the Acquisition, Cirrus will change its name to "American Copper
Development Corporation", and to trade under the ticker symbol "ACDX".
Rick Van Nieuwenhuyse comments: "It has taken a lot of effort over several years to put this deal
together and consolidate this 50 square mile land position in this exciting porphyry copper district
surrounded by major copper producers.
The Lordsburg district has produced gold-silver from high grade
epithermal veins as well as lead-zinc and most importantly high-grade copper from the deeper levels of
historic workings.
There is strong district-scale zoning of the metals indicating that there are several
areas where copper rich classic "D" veins (quartz-kspar-sericite-chalcopyrite) have been historically
mined and intersected in drilling from underground.
Historic drill intersections range from 2 to 3 meters
grading 3% to 9% copper plus significant precious metals.
These "D" veins typically occur above and
adjacent to productive porphyry systems.
American Copper has engaged Quantec Geoscience to
complete a detailed Induced Polarization survey across approximately 30 square miles of the district.
In
addition, detailed airborne magnetic, magnetotelluric and LIDAR surveys are also planned. These high-
quality geophysical surveys will be used in combination with detailed geologic surface mapping,
underground geology based on historic mapping and drilling to target a deep-seated porphyry and/or
skarn-related mineralization.
Lordsburg is located in the heart of the southwest porphyry copper
province - the most productive copper province in the United States.
We are excited to undertake
the first modern exploration program to discover a large porphyry copper-related deposit.
It's the right
place and the right time - let's Rock-n-Roll!"
Terms of the Transaction
Upon completion of the Acquisition, Cirrus will acquire the Lordsburg Property from the Vendors, as
described in further detail in the Previous News Release, in consideration for a combination of common
shares in the capital of Cirrus (the "
Common Shares
"), cash, milestone payment rights (the "
Milestone
Payments
") and net smelter return ("
NSR
") royalties as further described below.
On closing of the Acquisition, Cirrus will (i) pay PPM $2,331,500 in cash (which includes $1,831,500 in
proceeds from the sale of 8,140,000 Common Shares arranged by the Company that were disclosed in
the Previous News Release as share consideration to PPM), (ii) issue PPM or its designee 8,140,000
Common Shares, (iii) make the Milestone Payments (as described below), and (iv) grant PPM or its
designee a 1.5% NSR royalty on minerals produced from the lands purchased from PPM (except for
certain excluded claims subject to pre-existing royalties) and a 0.5% NSR royalty on all minerals
produced from the lands purchased from Mason (the "
PPM Royalties
"). Cirrus will (i) issue Mason or its
designee 9,896,591 Common Shares and (ii) grant Mason or its designee a 1.5% NSR royalty on
minerals produced from the lands purchased from Mason and a 0.5% NSR royalty on all minerals
produced from the lands purchased from PPM (except for certain excluded claims subject to pre-existing
royalties) (the "
Vendor Royalties
").
With respect to Milestone Payments, Cirrus will enter into a milestone payment rights agreement with
PPM, or a designee of PPM (the
"Milestone Agreement
"), and pay PPM the transferable right to
receive cash (or subject to the terms of the Milestone Agreement, Common Shares) according to the
following payment schedule: (i) $1,000,000 on the date that is 12 months following the date of the
Milestone Agreement, (ii) $1,500,000 on the date that is 24 months following the date of the Milestone
Agreement, and (iii) $2,500,000 on the date that is 36 months following the date of the Milestone
Agreement.
Further details of the Acquisition will be included in subsequent news releases and disclosure
documents (which will include business and financial information in respect of Cirrus) to be filed in
Canada in connection with the Acquisition. Closing of the Acquisition is expected to occur by May 30,
2022 and is subject to a number of customary conditions, including, without limitation, the execution of
related transaction documents, satisfaction of certain closing conditions, completion of the Concurrent
Financing (as defined below) and receipt of all requisite shareholder and regulatory approvals in
connection with the Acquisition, including approval of the CSE.
Concurrent Equity Offering
In connection with the Acquisition, Cirrus intends to complete a best efforts private placement of
approximately $10 million at a price of $0.25 per subscription receipt (the "
Concurrent Financing
"),
each of which will automatically convert into Common Shares upon completion of certain escrow
conditions, most notably the closing of the Acquisition. Additional details concerning the terms of the
Concurrent Financing will be provided in a subsequent news release.
This news release does not constitute an offer to sell and is not a solicitation of an offer to buy any
securities in the United States. The securities of the Company 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 within the United States or to "U.S. Persons" (as defined
in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state
securities laws or pursuant to an exemption from such registration.
About the Company
Cirrus is engaged in the business of mineral exploration and the acquisition of mineral property assets in
New Mexico and British Columbia. Its objective is to locate and develop economic copper and other
base and precious metal properties of merit and to conduct its exploration programs on the Lordsburg
Property in New Mexico and the Chuchi South Property in British Columbia.
For more information, please refer to the Company's prospectus dated July 7, 2021, available on
SEDAR (
www.sedar.com
).
Cirrus Gold Corp.
For further information, please contact:
James Walchuck
Chief Executive Officer, President and Director
Phone: (778) 372-9888
Email:
Website:
www.american-copper.com
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking information" under applicable Canadian securities
legislation. Forward-looking information involves risks, uncertainties, and other factors that could cause
actual results, performance, prospects, and opportunities to differ materially from those expressed or
implied by such forward-looking information. Forward-looking information in this news release includes,
but is not limited to, statements with respect to: the structure, terms and conditions of the Acquisition; the
completion of the Acquisition and satisfaction of any obligations thereunder, the completion of the
Concurrent Financing; the satisfaction of any Milestone Payments being made; the Vendor Royalties; the
Company's objectives, goals or future plans; the requisite approvals with respect to the Acquisition; and
the business, operations, management and capitalization of Cirrus following closing. Forward-looking
information is necessarily based on a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause
actual results and future events to differ materially from those expressed or implied by such forward-
looking information. Such factors include, but are not limited to: general business, economic and social
uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive
developments; delay or failure to receive board, shareholder or regulatory approvals; those additional
risks set out in Cirrus' public documents filed on SEDAR at
http://www.sedar.com
; and other matters
discussed in this news release. Accordingly, the forward-looking information discussed in this release,
including the completion of the Acquisition and Concurrent Financing, may not occur and could differ
materially as a result of these known and unknown risk factors and uncertainties affecting Cirrus.
Although Cirrus believes that the assumptions and factors used in preparing the forward-looking
information are reasonable, undue reliance should not be placed on this information, which only applies
as of the date of this news release, and no assurance can be given that such events will occur in the
disclosed time frames or at all. Except where required by law, Cirrus disclaims any intention or
obligation to update or revise any forward-looking information, whether as a result of new information,
future events, or otherwise.
Reader Advisory
Completion of the Acquisition and Concurrent Financing is subject to a number of conditions,
including but not limited to CSE acceptance. The Acquisition and Concurrent Financing cannot close
until these conditions are satisfied or, if applicable, waived. There can be no assurance that the
Acquisition and Concurrent Financing will be completed as proposed or at all. Investors are cautioned
that, except as disclosed in the listing statement or other disclosure document to be prepared in
connection with the Acquisition and Concurrent Financing, any information released or received with
respect to the Acquisition and Concurrent Financing may not be accurate or complete and should not
be relied upon. Trading in the securities of Cirrus should be considered highly speculative.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/125368