Chesapeake Gold Announces Acquisition of Alderley Gold Corp. Creating a Platform for Future Growth and Mining Innovation; Alan Pangbourne to Be Appointed Chief Executive Officer
Chesapeake Gold Announces Acquisition of
Alderley Gold Corp. Creating a Platform for
Future Growth and Mining Innovation; Alan
Pangbourne to Be Appointed Chief Executive
Officer
Vancouver, British Columbia--(Newsfile Corp. - December 10, 2020) - Chesapeake Gold Corp. (TSXV:
CKG) (OTCQX: CHPGF) ("
Chesapeake
" or the "
Company
"), is pleased to announce that it has
entered into a definitive agreement on December 9, 2020 (the "
Agreement
") to acquire Alderley Gold
Corp. ("
Alderley
"), a private British Columbia mining technology company. With the acquisition of
Alderley, Chesapeake gains access to a proven and innovative precious metals processing technology
(the "
Technology
") together with certain asset rights and proprietary databases, creating the path
towards a new growth oriented and innovative gold and silver producer. Chesapeake will now focus on
progressing the Metates project towards production using the Technology in a heap leach operation.
Transaction
Highlights
Establishes a well-capitalized, gold-silver development company:
Chesapeake has a
strong balance sheet with C$35 million in cash to advance its flagship Metates project. Metates is
a major undeveloped gold, silver and zinc deposit located in Mexico.
Developing Metates as a low cost, scalable sulphide heap leach mine:
Preliminary test work
using the Technology indicates the optimal path forward for Metates would be to develop a low
capital cost, sulphide heap leach operation. Metallurgical test work confirms that the liberation of
gold in the Metates sulphides by oxidation using certain chemistry to manage pH and alkalinity
significantly improves metal recoveries during cyanide leaching.
Proven, skilled additions to Chesapeake Management Team and Board:
Alan Pangbourne
and Randy Buffington bring over 60 years experience building and operating large scale projects
throughout the Americas, as well as a proven history of developing and applying innovative
processing technologies in the mining sector.
Growth through M&A:
The combined team has an extensive and highly successful track record
of M&A and mine operational improvements.
Superior capital markets exposure:
The combined team provides further access and
relationships across the global mining industry, key financial institutions, and a proven ability to
raise capital throughout a commodity cycle; creating a strong precious metals company that can
rapidly transact on value accretive opportunities.
Randy Reifel, Chesapeake's President, commented: "I am very excited for the Alderley team to join
Chesapeake as they work to demonstrate the true potential of Metates as a low cost, sulphide heap
leach operation with a 30 year plus mine life. We are very impressed by the Alderley team's track record
of innovation in the mining space and experience with developing and applying leading edge processing
technologies. This partnership is the first step towards building a truly innovative and successful multi-
mine gold producer in the coming years."
Alan Pangbourne, incoming Chief Executive Officer and Director, commented: "Randy's reputation as an
innovative and forward-thinking entrepreneur in Canada is well documented, with his notable successes
at Francisco Gold Corp., Glamis Gold Ltd. and Goldcorp Inc. We look forward to a long and successful
partnership with the Chesapeake team in implementing proven and tested oxidation technologies on
Metates, as well as other future portfolio projects."
Technology
Through the acquisition of Alderley, Chesapeake gains access to Alderley's sulphide leaching
Technology. The Technology oxidizes sulphide and transition ores using certain chemistry to manage pH
and alkalinity thereby increasing recovery and reducing potential to turn acidic during cyanide leaching.
The rights to the Technology are held under licence by Alderley which requires Alderley to pay a 1% NSR
on any future production using the Technology.
Chesapeake has conducted preliminary indicative testing on several samples from the Metates project.
Metallurgical test results were positive and indicate the process will promote the oxidation of the
sulphides to a level that will allow the subsequent leaching and recovery of gold and silver. With the
Technology, the development of Metates as a heap leap operation will not envision autoclave circuits
leading to significantly lower capital and processing costs, stronger overall project economics and a
greatly reduced environmental footprint.
Management and Board of Directors Additions
At closing, Alan Pangbourne (former CEO of Guyana Goldfields Inc.) will become CEO and a director of
Chesapeake, and Randy Buffington (former CEO of Hycroft Mining Holding Corporation
)
will join the
Chesapeake Board.
Randy Reifel will continue as President and Chairman of Chesapeake's Board.
Taje Dhatt will be joining Chesapeake to focus on the capital markets and advisory side of the business.
In Chesapeake, the respective title positions will be as follows:
Alan Pangbourne,
CEO & Director
Mr. Pangbourne has over 35 years of experience in mining operations and was most recently
President & CEO of Guyana Goldfields Inc. through to its sale to Zijin Mining Group Co., Ltd.
in August 2020 at a 378% premium.
He was also previously Chief Operating Officer of SSR Mining Inc., where his efforts led to
over a 400% increase in annual production over 5 years; Vice President Projects South
America for Kinross Gold Corporation; and held a number of senior roles over 15 years at
BHP Billiton Ltd
Mr. Pangbourne holds a Bachelor of Applied Science (Extractive Metallurgy) and a Graduate
Diploma in Mineral Processing from the Western Australian School of Mines.
Randy Buffington,
Director
Mr. Buffington has more than 28 years' experience in the mining industry and was most
recently Chairman, President and Chief Executive Officer of Hycroft Mining Holding
Corporation until July 2020.
He was previously Senior Vice President of Operations for Coeur d'Alene Mines Corp. and
served in management roles for Barrick Gold Corporation including General Manager of the
Goldstrike mine.
Mr. Buffington has a Masters degree in Civil Engineering.
Taje Dhatt,
VP Strategy & Corporate Development
Mr. Dhatt co-founded Alderley and has a decade of experience advising companies on
mergers and acquisitions, stream/royalty transactions and other corporate finance matters.
Mr. Dhatt holds a B.B.A. from the Schulich School of Business at York University.
Transaction Agreement
Under the terms of the Agreement, Chesapeake will issue 10 million common shares ("
Common
Shares
") to the shareholders of Alderley (the "
Alderley Shareholders
") resulting in the Alderley
Shareholders holding approximately 14.2% of the outstanding common shares of the Company on a fully
diluted basis. The Alderley Shares will be issued into escrow with release based on time and milestone
conditions over 7 years as follows:
a
.
5% released on each of the first four anniversaries of Closing;
b
.
10% released on the earlier of (a) date of a positive feasibility study and (b) the fifth anniversary of
Closing
c
.
30% released on the earlier of (a) duly certified commencement of construction of a mine and (b)
the sixth anniversary of Closing;
d
.
40% released on the earlier of (a) duly certified commencement of commercial production and (b)
the seventh anniversary of Closing.
This escrow release structure confirms the commitment of the Alderley Shareholders to the future
development of Chesapeake and aligns their interest in creating long term value for all shareholders. The
transaction is subject to approval of the TSX Venture Exchange
Upcoming Project Development & Catalysts
With over $35 million in cash and marketable securities, Chesapeake is fully funded for its development
programs contemplated through 2022. The Company plans to complete on Metates a revised technical
report and economic assessment in 2021 based on the new process route and development strategy.
As well, the Company plans to conduct further metallurgical testing, update internal geo-metallurgical
models, sample and confirmation drilling, rebuild its reserve and resource models for the Alderley
Technology, as well as to update environmental and social baseline data for permitting purposes. This
development work will form the basis for an updated prefeasibility study for Metates which would be
targeted for release in early 2022.
Stock Option Grants:
The Board of Directors has also granted incentive stock options ("Options") to the new directors and
officer for 1,850,000 common shares at an exercise price of $4.56 per share. The Options are
exercisable for a term of five years from the date of the grant and will vest as to 25% annually on each
anniversary of the date of grant.
About Chesapeake
Chesapeake Gold Corp. is focused on the discovery, acquisition and development of major gold-silver
deposits in North and South America. Chesapeake's flagship asset is the Metates project ("Metates")
located in Durango State, Mexico. Metates is a major undeveloped gold, silver and zinc deposit located
in Mexico.
Chesapeake also has developed an organic pipeline of satellite exploration properties strategically
located near Metates. In addition, the Company owns 74% of Gunpoint Exploration Ltd. ("Gunpoint")
which owns the Talapoosa gold project in Nevada.
About Alderley
Alderley Gold Corp. is a Canadian company, founded in 2018, and focused on the advancement and
development of proprietary technologies that significantly reduce the cost of construction and processing
for certain refractory sulphide precious metal ore bodies. With a team of highly successful mine builders
and entrepreneurs, Alderley seeks to significantly improve the project economics of existing orebodies
and greatly reduce their planned environmental footprints.
Mr. Gary Parkison, CPG, Vice President Development of Chesapeake, is the qualified person who has
reviewed and approved the technical information contained in this news release.
For Further Information:
For more information on Chesapeake and its Metates Project, please visit our website at
www.chesapeakegold.com
or contact Randy Reifel at 604-731-1094 or Alan Pangbourne at
.
CHESAPEAKE GOLD CORP
"
P. Randy Reifel
"
President & Chairman
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
news release.
Forward-looking Statements
This news release contains "forward-looking information" which may include, but is not limited to,
statements with respect to completion of the Alderley transaction and use and application of Technology.
Forward-looking statements are based on the opinions and estimates of management as of the date
such statements are made and are based on various assumptions.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be materially different from
any future results, performance or achievements expressed or implied by the forward-looking
statements. Such factors include, among others, the ability to complete the Alderley transaction, receipt
of applicable regulatory approvals, the successful application of the Technology to the Metates project,
general business, economic, competitive, political and social uncertainties; the actual results of
exploration activities; changes in project parameters as plans continue to be refined; accidents, labour
disputes and other risks of the mining industry, and political instability. Although the Company has
attempted to identify important factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be other factors that cause
actions, events or results to differ from those anticipated, estimated or intended. Forward-looking
statements contained herein are made as of the date of this news release and the Company disclaims
any obligation to update any forward-looking statements, whether as a result of new information, future
events or results, except as may be required by applicable securities laws. 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.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/70007