Barksdale Announces Option to Acquire up to 67.5% of Patagonia/Sunnyside Property IN Santa CRUZ County, Arizona and Concurrent Private Placement Financing
BARKSDALE CAPITAL CORP.
Suite 610, 815 West Hastings Street
Vancouver, BC, V6C 1B4
Tel: 778-588-7139
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
BARKSDALE ANNOUNCES OPTION TO ACQUIRE UP TO 67.5% OF
PATAGONIA/SUNNYSIDE PROPERTY IN SANTA CRUZ COUNTY, ARIZONA AND
CONCURRENT PRIVATE PLACEMENT FINANCING
August 15, 2017 – Vancouver, B.C. – Barksdale Capital Corp. (TSX-V: BRO.H) (“Barksdale” or
the “Company”) is pleased to announce it has entered into arm’s length definitive agreements
(collectively the “Definitive Agreement”) to acquire, by way of option (the “Option”) and subject
to underlying royalties , up to a 67.5% undivided interest in 2 86 unpatented mining lode claims
comprising approximately 5,223.71 acres (2,113.96 hectares) known as the Patagonia/Sunnyside
property located in Santa Cruz County, Arizona (the “ Sunnyside P roperty”) owned and/or
controlled by Regal Resources USA, Inc., a Nevada subsidiary of Regal Resources Inc., a B ritish
Columbia reporting issuer (together “Regal”).
The Sunnyside Property is located approximately 80 km (~50 miles) south of Tucson, AZ and 20
km (~12 miles) northeast of Nogales, AZ. The project straddles the Harshaw (northeast), Patagonia
(south) and Palmetto (northwest) mining districts and is situated in a broad northwest trending
corridor of porphyry copper deposits that straddle the U.S./Mexico border from the La Caridad
mine in Central Sonora, Mexico through to the Mineral Park located in northwestern Arizona.
Commenting on the Agreement, Richard Silas, President and Chief Executive Officer of Barksdale,
said “Barksdale’s geological advisors believe the Sunnyside Property has the potential to host zinc
mineralization similar to the adjoining Hermosa Project held by Arizona Mining Inc. Our aim is to
evaluate this potential by drilling the targets we have identified in our preliminary assessment of
the property.” Arizona Mining is a mineral exploration and development company focused on its
100%-owned Taylor Deposit, a carbonate replacement zinc-lead-silver deposit which is reporting
a large and growing high grade resource.
The primary target consists of a large, 0.9 mile (~ 1.5 km) diameter diatreme breccia complex
overlying a deep porphyry copper system in the north central part of the property along with a
number of shallow (within ~ 1,000 metres of surface) porphyry Cu (and Cu- Mo) and Cu (+/- Ag)
targets associated with abundant breccia pipe systems mapped throughout the property and
secondary chalcocite enrichment zones as identified from limited historical drilling.
In addition, historic drill hole TCH-2 represents a potential northwesterly extension of the recently
discovered Taylor base metal skarn/replacement deposit belonging to Arizona Mining located
approximately 750 metres to the southeast. This core hole, drilled in the early 1970’s, intersected
multiple horizons of polymetallic (Cu -Pb-Zn-Ag) replacement skarn hosted mineralization , with
increased copper grades to the west indicating that the porphyry system’s source m ay originate
from the Sunnyside Property. Highlights from TCH-2 include:
Drill Hole TCH-2
Depth (ft.)
From
Depth (ft.)
To
Vertical
Thickness (ft) Cu% Pb% Zn% Ag oz/st
4127 4166 39 0.71 0.21 0.12 1.20
4195 4209 14 2.32 0.73 0.09 5.90
4653 4710 57 1.3 5.00 12.2 10.80
4767 4891 124 0.23 0.86 14.10 7.40
TCH-2 was drilled prior to the implementation of National Instrument 43 -101 Standard of
Disclosure for Mineral Projects (“NI 43-101”), has not been verified by a “qualified person” and
therefore should not be relied upon. It has been presented to provide an indication of the possible
mineralization within the Sunnyside Property and as a guide to future exploration.
Terms of Option
The Option is exercisable in two stages with the Company entitled to acquire an initial 51% interest
in the Sunnyside Property upon making payments totaling C$2,950,000 cash ($100,000 paid) and
10,100,000 common shares to Regal and cumulative expenditures of C$6,000,000 on the property
during the first two years of the Option (following receipt of all required governmental permits).
Upon acquiring an initial 51% interest in the Sunnyside Property, the Company will be entitled to
increase its interest to 6 7.5% upon payment of an additional C$550,000 cash and 4,900,000
common shares to Regal and the expenditure of an additional C$6,000,000 on the property within
a further two year period.
The following is a summary of the Option earn-in requirements:
Period C$ Cash Exploration
Requirement C$
Number of
Shares
To Earn 51% Interest
Upon execution of Definitive
Agreement
$100,000
(paid)
Within 3 days following conditional
acceptance of TSXV
650,000 - 1,250,000
On or before end of Year 1 * 1,200,000 3,000,000 3,850,000
On or before end of Year 2 1,000,000 3,000,000 5,000,000
To Increase Interest to 67.5%
On or before end of Year 3 - 3,000,000 -
On or before end of Year 4 550,000 3,000,000 4,900,000
Total: C$3,500,000 C$12,000,000 15,000,000
∗ Year 1 shall commence on the date the Company has received all required governmental
permits including drilling permits to carry out its initial exploration program on the
property.
Upon the Company earning either a 51% interest or 67.5% interest in the Sunnyside Property, the
Company and Regal will enter into and participate in a joint venture for the purpose of further
exploring and developing the property. The Definitive Agreement contains provision for dilution
of a party’s working interest for failure to fund joint venture cash calls, subject to automatic
conversion of a party’s interest into a 5% net proceeds interest (not to exceed 90% of the net amount
of the party’s contributed capital) if diluted to less than 10%. Barksdale will be the operator of the
Sunnyside Property during the term of the Option and, if applicable, the joint venture.
The Definitive Agreement further provides that:
(1) during the first two years of the Option, Regal shall vote all of its Barksdale shares in
accordance with the recommendations of the Company’s management from time to time,
other than matters relating solely to Regal or the Sunnyside Property and subject to Regal’s
right to abstain from voting in its discretion;
(2) Regal shall give the Company not less than five (5) days advance notice of any proposed sale
of Barksdale shares for so long as Regal owns 5% or more of the Company’s outstanding
shares;
(3) until such time as the Company has earned a 51% interest in the Sunnyside Property, the
Company will not acquire, directly or indirectly, any common shares of Regal without the
prior consent of Regal; and
(4) the Company has a 15 day right of first refusal to acquire all or any part of Regal’s remaining
interest in the Sunnyside Property in the event of a proposed sale or transfer of such interest
by Regal.
The Company may terminate the Option at any time, in its discretion, subject to satisfying any
accrued obligations or liabilities including reclamation requirements, as required.
The Definitive Agreement remains subject to the acceptance of the TSX Venture Exchange (the
“TSXV”).
Private Placement
The Company also announces a non-brokered private placement of 7,000,000 common shares at a
price of C$0.40 per share to raise gross proceeds of C$2,800,000 (the “Private Placement”). The
net proceeds of the Private Placement will be used to make the cash payment of C$650,000 to Regal
upon TSXV acceptance of the Option, fund initial exploration programs on the Sunnyside Property
and the Company’s previously acquired Swales project in Elko, Nevada (see news release dated
December 16, 2016) (the “ Swales Project ”) and for general corporate and working capital
purposes. The Private Placement is subject to acceptance of the TSXV and f inder’s fees in
accordance with TSXV policies may be payable in connection with the Private Placement.
Technical Reports
The Company has received independent technical reports prepared in accordance with NI 43-101
for the Sunnyside Property and the Swales Project and will file same under the Company’s profile
on SEDAR following acceptance by the TSXV.
Grant of Stock Options
The Company has also granted, subject to TSXV acceptance, stock options to directors, officers
and consultants of the Company to purchase up to an aggregate of 2,000,000 common shares at a
price of $0.42 per share exercisable for a period of five years.
The scientific and technical content and interpretations co ntained in this news release have been
approved by Lewis Teal, CPG 6932, a consultant to the Company and a qualified person as defined
by NI 43-101, Standards of Disclosure for Mineral Projects.
ABOUT BARKSDALE CAPITAL CORP. – Barksdale Capital Corp. is f ocused on the
acquisition and exploration of highly prospective precious and base metal projects in the United
States.
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 news release.
On behalf of the Board of Directors of Barksdale Capital Corp.,
“Richard Silas”
Richard Silas, President and Director
FOR FURTHER INFORMATION PLEASE CONTACT:
Richard Silas
President
Tel: 778-588-7139
Email: [email protected]
This news release contains forward -looking statements, which relate to future events or future
performance and reflect management’s current expec tations and assumptions including, but not
limited to, the prospective nature of the Sunnyside Property and the proposed Private Placement
and intended use of proceeds therefrom . Such forward-looking statements reflect management’s
current beliefs and are based on assumptions made by and information currently available to the
Company. Investors are cautioned that these forward looking statements are neither promises nor
guarantees, and are subject to risks and uncertainties that may cause future results to differ
materially from those expected. Risk factors affecting the Company include, among others: global
financial conditions and volatility of capital markets, uncertainty regarding the availability of
capital including the Private Placement , fluctuations in commodity prices; title matters; risks
associated with mineral exploration including the timing and availability of permits , uncertainty
surrounding exploration results and environmental issues and the additional risks identified in our
filings with Ca nadian securities regulators on SEDAR . The close proximity of the Sunnyside
Property to Arizona Mining’s Hermosa project is not necessarily indicative of the zinc and other
mineralization present on the Sunnyside Property. These forward-looking statements are made as
of the date hereof and, except as required under applicable law, the Company does not assume any
obligation to update or revise them to reflect new events or circumstances.
THIS NEWS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS
SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL
SECURITIES AND THE COMPANY IS NOT SOLICITING AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN.
THESE SECURITIES HAVE NOT BEEN REGISTERED U NDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.