Barksdale to Acquire Copper Asset and Announces Financing
BRO: TSXV BRKCF: OTCQB
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED STATES
Barksdale to Acquire Copper Asset and Announces
Financing
Vancouver, B.C. – August 6, 2020 - Barksdale Resources Corp. (“Barksdale” or
the “Company”) (TSXV: BRO) (OTCQB: BRKCF) is pleased to announce that it has
signed a binding Letter of Intent (the “LOI”) securing an option to acquire a 100%
interest in the San Javier copper-gold project in Sonora, Mexico (the “Transaction”)
from Tusk Exploration Ltd. (“Tusk”), a private British Columbia company.
San Javier Project Highlights
• Acquisition of a high -quality, developable copper asset located within close proximity
to Barksdale’s Arizona asset portfolio
• “Under the radar” private opportunity with multiple shallow copper zones located
immediately adjacent to a national highway and power grid
• Significant exploration potential upside in an under-explored district
• Data-rich environment with approximately 30,000 meters of historical drilling with
significant copper intercepts , including 191.6 meters grading 0.43% copper (oxide)
and 15 meters grading 4.34% copper and 0.94 g/t gold (sulfide)
• Historically overlooked gold-dominated drill intercepts such as 30.0 meters of 1.72 g/t
gold (oxide) as well as 9.0 meters grading 5.23 g/t gold (oxide)
Following the closing of the Transaction, Barksdale will be a well -financed base and
precious metal explorer with an actionable copper- gold project in Mexico and
attractive copper-zinc-lead-silver-gold exploration assets in an emerging and
valuable base metal exploration district in the United States. The Transaction is an
initial step in Barksdale becoming a larger multi -asset company and will accelerate
our entry into a potential growth phase driven by high- impact exploration that will
begin in the next few months.
Rick Trotman, CEO of Barksdale said: “ Our sights are firmly set on making
discoveries that have the potential to deliver significant upside to our shareholders.
The acquisition of San Javier will not only add a new district with robust di scovery
potential to our asset base, but it should also serve as a strong catalyst to enhance
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our engagement with our excellent shareholder base as we drive our permitting
processes at Sunnyside and San Antonio to completion. We are entering an exciting
phase of growth at Barksdale and I am truly excited to get the drills turning in the
near term. We are also conducting a concurrent financing to ensure that our treasury
remains strong as we push our portfolio of projects forward.”
Randy Reifel, President of Tusk said: “We are very excited to partner with Barksdale
as we enter the early days of the next copper bull market. Matching the near- term
exploration and development potential at San Javier with the great exploration
upside at Sunnyside and San Antonio creates strategic accretive value for both Tusk
and Barksdale shareholders.”
About the Project
The San Javier property is in central Sonora, Mexico, approximately a two-hour drive
(125km) east of the capita l city of Hermosillo (population ~800,000) along National
Highway 16 and approximately a six-hour drive from Barksdale’s projects in southern
Arizona. The property consists of twelve separate mineral concessions totaling
approximately 1,184 hectares, upon which multiple zones of copper mineralization
have been identified to date . The project is positioned with significant logistical
advantages as Cerro Verde, the main mineralized zone, is located less than 1km
from a paved highway as well as the national power grid.
Multiple companies have previously explored and drilled within the San Javier
property position, including Servicios Industriales Peñoles S.A. de C.V., Phelps Dodge,
Outukumpu Oyj and Constellation Copper. Notably, the San Javier property has not
been actively worked since 2007. Approximately 30,000 meters of drilling has been
completed to date in three separate zones, two of which contain historic resource
estimates which Barksdale believes can be expanded significantly.
Mineralization at Cerro Verde, the most densely drilled zone ( ~90% of historic
drilling), consists of structurally controlled hydrothermal breccias, stockworks, and
veins that have intense specular hematite associated with copper mineralization.
The mineralization has been characterized by previous operators as typical of an
iron-oxide-copper-gold (“IOGC”) system, which generally exhibit structurally
controlled mineralization. Previous exploration activity w as focused on delineating
near-surface oxidized mineralization, for the purpose of bulk mining. Hence, the
structurally controlled high- grade mineralization that was encountered was never
adequately followed- up on and thus represents a significant opportunity for
Barksdale. Additionally, gold-dominant oxide mineralization as well as copper- gold
sulfide mineralization has been encountered historically and require s additional
investigation.
Select historic intercepts include the following (1):
HoleID From To Intercept Copper Gold Metallurgy
SJ07B-01 0.0 191.6 191.6 0.43% no assay oxide
SJ07-83 0.0 54.0 54.0 0.75% no assay oxide
and 54.0 123.0 69.0 0.57% no assay sulfide
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SJ07-78 21.0 54.0 33.0 1.47% no assay mixed
SJ06-46 0.0 87.0 87.0 0.97% 0.16 oxide
including 27.0 33.0 6.0 6.45% 0.10 oxide
and 87.0 102.0 15.0 4.34% 0.94 mixed
including 87.0 93.0 6.0 8.99% 1.27 mixed
SJ06-04 0.0 189.0 189 0.38% 0.49 oxide
including 84.0 147.0 63.0 0.35% 1.26 oxide
including 96.0 99.0 3.0 0.38% 4.93 oxide
and 111.0 120.0 9.0 0.17% 5.23 oxide
SJ06-10 78.0 120.0 42.0 0.53% 1.09 oxide
including 81.0 96.0 15.0 1.07% 0.42 oxide
and 93.0 108.0 15.0 0.37% 2.29 oxide
SJ06-11 147.0 164.0 17.0 0.24% 1.56 oxide
SJ06-48 0.0 36.0 36.0 0.32% 0.15 oxide
and 96.0 105.0 9.0 0.10% 3.73 oxide
and 132.0 234.0 102.0 0.42% 0.06 mixed
(1) These assay results are historic in nature , have not been verified by Barksdale
and should not be relied upon. They are presented solely to provide an
indication of the potential extent of the mineralization at San Javier and as a
guide to future exploration.
Acquisition Summary
Under the terms of the LOI , Barksdale may acquire a 100% interest in San Javier
over a period of up to six-years by making, subject to adjustment in certain
circumstances, aggregate payments of C$500,000 in cash, delivery of 1 3 million
Barksdale shares, and issuance of a small sliding scale royalty in favor of Tusk. The
payment schedule is as follows:
Due Date for Option Payment C$ Cash Number of
Barksdale Shares
Within 3 business days following the later of
(a) execution and delivery of Definitive
Agreement and (b) TSXV conditional
acceptance of Option
$50,000 4,000,000
On or before the first anniversary of the
Definitive Agreement
$100,000 2,000,000
On or before the earlier of (a) the third
anniversary of the Definitive Agreement and
(b) the completion of a “pre-feasibility
study” on the Property
$150,000 3,000,000
On or before the earlier of (a) the sixth
anniversary of the Definitive Agreement and
(b) the date Barksdale enters into definitive
documentation for financing the
construction of a mine on the Property
$200,000 4,000,000
Total:
C$500,000 13,000,000
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Upon exercise of the Option, Barksdale will also provide an NSR on the San Javier
project of 1.0% when copper prices are less than US$3. 50 per pound and 2.0%
when copper prices are over US$3.51 per pound. The royalty is subject to a right of
first refusal in favor of Barksdale.
The Transaction is subject to completion of final legal due diligence by Barksdale,
execution of a definitive agreement, closing a concurrent financing, customary
closing conditions and acceptance of the TSX Venture Exchange (“ TSXV”). The
Transaction does not require Barksdale shareholder approval.
Concurrent Financing
Barksdale intends to complete a non- brokered private placement financing of
10,526,316 units (the “Units”) at a price of $ 0.38 per Unit for gross proceeds to the
Company of $4,000,000 (the “Offering”). Each Unit will consist of one common share
of Barksdale (each a “Common Share”) and one- half of one common share purchase
warrant (each whole warrant, a “Warrant”). Each Warrant shall entitle the holder to
acquire one Common Share at a price of $ 0.55 for a period, subject to acceleration,
of 24 months follow ing closing of the Offering. The Company may elect to increase
the Offering by up to an additional $1,000,000, based on demand.
The proceeds of the Offering will be used to finance exploration activities at the
Company’s properties in Arizona and Mexico as well as for working capital and
general corporate purposes.
Closing of the Offering is expected to occur on or about August 28, 2020, subject to
increase in the event Osisko Gold Royalties and/or Teck Resources Ltd. elect to
exercise their equity participation rights in the Offering to maintain their current
equity ownership interests in the Company (see news releases dated December 17,
2018 and June 11, 2019, respectively). All securities issued by Barksdale will be
subject to a minimum hold period of four months and one day and completion of the
Offering is subject to customary closing conditions, including acceptance of the TSXV.
The Company may pay finder’s fees in cash, shares and/or warrants in connection
with the Offering in accordance with the policies of the TSXV.
Next Steps
Subject to TSXV approval, board approval, and completion of satisfactory legal due
diligence, Barksdale expects the Transaction will be completed near the end of
August 2020. Exploration, permitting, and social engagem ent plans are currently
being prepared and the Company intends to begin technical work immediately upon
closing of the Transaction. It is anticipated that an exploration drilling program will
be initiated once drilling approvals are received from the relevant permitting
authorities, which are expected in the next few months.
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Market Maker Engaged
Barksdale has, subject to regulatory approval, retained Venture Liquidity Providers
Inc. (VLP) to initiate its market- making service to provide assistance in maintaining
an orderly trading market for the common shares of the Company.
The market-making service will be undertaken by VLP through a registered broker,
W.D. Latimer Co. Ltd., in compliance with the applicable policies of the TSX V and
other applicable laws. For its services, the Company has agreed to pay VLP $5,000
per month for a period of up to 12 months. The agreement may be terminated at any
time by the Company or VLP. The Company and VLP act at arm's length, and VLP has
no present interest, directly or indirectly, in Barksdale or its securities. The finances
and shares required for the market- making service are provided by W.D. Latimer.
The fee paid by the Company to VLP is for services only and will be funded out of the
Company’s general working capital.
VLP is a specialized consulting firm based in Toronto providing a variety of services
focused on TSXV-listed issuers.
Technical information in this news release has been revie wed and approved by Lewis
Teal, Senior Consultant to the Company and a ‘Qualified Person’ as defined under
Canadian National Instrument 43-101.
Barksdale Resources Corp. is a base metal exploration company headquartered in
Vancouver, BC, that is focused on the acquisition, exploration and advancement of
highly prospective base metal projects in North America.
ON BEHALF OF BARKSDALE RESOURCES CORP
Rick Trotman
President, CEO and Director
Terri Anne Welyki
Vice President of Communications
778-238-2333
For more information please phone 778-558-7145, email
[email protected] or visit www.BarksdaleResources.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchang e) accepts responsibility for the adequacy
or accuracy of this news release.
CAUTIONARY STATEMENT REGARDING FORWARD -LOOKING INFORMATION: This news
release includes “forward-looking information” under applicable Canadian securities legislation
including, but not limited to, the terms of and anticipated closing date for the San Javie r
Transaction, the prospective trends, targets and mineralization at San Javier and the
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Company’s initial exploration plans therefor and the proposed terms, conditions and timing of
the Offering. Such forward-looking information reflects management’s curre nt beliefs and are
based on a number of estimates and assumptions made by and information currently
available to the Company that, while considered reasonable, are subject to known and
unknown risks, uncertainties, and other factors which may cause the act ual results and future
events to differ materially from those expressed or implied by such forward -looking
information. Readers are cautioned that such forward -looking information are neither
promises nor guarantees, and are subject to known and unknown ri sks and uncertainties
including, but not limited to, general business, economic, competitive, political and social
uncertainties, uncertain and volatile equity and capital markets, lack of available capital,
actual results of exploration activities, enviro nmental risks, future prices of base and other
metals, operating risks, accidents, labor issues, delays in obtaining governmental approvals
and permits, and other risks in the mining industry. There are no assurances that the
Company will successfully complete the acquisition of San Javier or the Offering on the terms
set out herein or at all. In addition, there is uncertainty about the spread of COVID -19 and
the impact it will have on the Company ’s operations, supply chains, ability to access mineral
properties including San Javier, conduct due diligence or procure equipment, contractors and
other personnel on a timely basis or at all and economic activity in general. All forward -
looking information contained in this news release is qualified by these caut ionary statements
and those in our continuous disclosure filings available on SEDAR at www.sedar.com.
Accordingly, readers should not place undue reliance on forward -looking information. The
Company disclaims any intention or obligation to update or revise any forward -looking
information, whether as a result of new information, future events or otherwise, except as
required by law.
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 UNDER 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.