Discovery Metals Enters into Mineral Exploration and Option Agreement to Acquire an Additional Silver Rich Carbonate Replacement Concession IN Mexico
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Suite 2200, 885 West Georgia Street
Vancouver, British Columbia
V6C 3E8
NEWS RELEASE
DISCOVERY METALS ENTERS INTO MINERAL EXPLORATION AND OPTION AGREEMENT
TO ACQUIRE AN ADDITIONAL SILVER RICH CARBONATE REPLACEMENT CONCESSION
IN MEXICO
Vancouver, British Columbia – June 14, 2017 – Discovery Metals Corp . (formerly “Ayubowan
Capital Ltd.:”) (the “Company” or “Discovery Metals”) (TSX-V: DSV.H) is pleased to announce that
it has entered into an additional mineral exploration and option ag reement (the “La Kika
Agreement”) dated June 7, 2017, with Jesus Miguel Hernandez Garza and Juan Reynaldo Elizondo
Falcon (together, the “Vendors”), providing option to acquire the La Kika mineral concession located
in the state of Coahuila, Mexico.
Discovery Metals is currently listed on NEX and on May 1, 2017 announced the entering into of a
mineral exploration and option agreement on the Puerto Rico Property in Ocampo, Coahuila, Mexico
(the “Principal Transaction ”). It is intended that the Principal Tr ansaction will constitute the
Company’s “reactivation” as defined under the policies of the TSX Venture Exchange (the
“Exchange”). Upon completion of the Principal Transaction and meeting all the conditions of the
Exchange, the Company will have its listi ng transferred from NEX to the Exchange. The Principal
Transaction will constitute a Change of Business and the Puerto Rico Property will be the Company’s
Qualifying Property under Exchange policies. Upon completion of the Principal Transaction the
Company will operate as a junior mining / exploration company.
The Principal Transaction, the La Kika Agreement and certain additional option agreement s
announced by the Company on June 1, 2017, are subject to, among other things, receipt of all
applicable regulatory approvals, the final approval of the Exchange and the satisfaction of customary
closing conditions, including the conditions described below. The proposed acquisition of the Puerto
Rico Property and the additional mineral c oncessions are arm's lengt h transaction s and do not
require shareholder approval under applicable securities or corporate legislation . As such, the
Company, with the consent of the Exchange, does not intend to seek the approval of its shareholders
to complete the Principal T ransaction. Sponsorship is required under Exchange policies and the
Company will be requesting a waiver of Sponsorship. There is no guarantee Sponsorship will be
waived.
Property Description
Discovery Metals is focused on discovering and advancing high grade S ilver-Zinc–Lead-Copper
carbonate-hosted deposits within a large district in northern Mexico. All targets, including La Kika,
will be assessed as potential milling or direct-ship mining opportunities.
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The La Kika Property hosts silver -lead-zinc carbona te replacement mineralization, hosted in
Mesozoic limestone. Mineralization is exposed as both mantos and a prominent high-angle breccia
zone in underground workings extending in a north -south direction for approximately 11 0 metres,
and to a depth of appr oximately 25 metres. Mineralization in the workings is open in all directions.
Numerous prospect pits are scattered over a 200 x 200 metre area. Mineralized material remaining
in the walls of underground workings and dump piles has been examined using a hand-held NitonTM
portable XRF analyzer. While routinely used in industrial settings to measure metal content of alloys,
etc., a single measurement of elemental abundance with a Niton ™ analyzer is not a substitute for
an assay at an accredited lab, as, in this context, it only measures elemental abundances on exposed
rock surfaces and not within the body of the rock. However, with repeated measurements over a
rock face, it can provide a semi -quantitative indication of the tenor of mineralization. The Niton™
testing returns values frequently exceeding 1,000 grams/ton silver and 30% combined lead and zinc
in mineralized areas of the underground workings and dump piles at La Kika. The timing of historic
mining is unknown. The La Kika Property has not seen any moder n exploration or drilling. The
remainder of the property is virtually unexplored.
Following closing, the Company intends to establish road access to the main prospect area and
begin exploration to establish the extent of silver -lead-zinc mineralization e xposed in the
underground workings and prospect pits.
At the present time, the Company considers the La Kika c oncession non-material and a technical
report under National Instrument 43 -101 ha s not been prepared. Subject to Exchange review, a
technical report may be required prior to, or following closing of the Principal Transaction, for the La
Kika concession.
Terms of the La Kika Agreement
Pursuant to the terms of the La Kika Agreement, the Company may exercise its option and acquire
the underlying La Kika concession on the following terms:
a) Reimbursing USD$45,000 to the Vendors on closing;
b) the Company incurring exploration expenditures of not less than US$2,000,000 within five
years, half of which is a firm expenditure commitment; and
c) the issuance to the Vendors of an aggregated 1,000,000 common shares.
In addition, the Company has agreed to pay the Vendors a royalty on the first 450,000 tonnes of ore
extracted by the Company from the La Kika concession. The royalty will equal 30% of the operating
profits in the event that the Company undertakes direct shipping operation s, or a 2% net s melter
return otherwise.
The Company will be the operator of the La Kika c oncession during the term of the La Kika
Agreement and is required to pay all mining duties t o maintain the underlying concessions in good
standing.
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Finders Fee
Further to the Company ’s press release dated June 1, 2017, the Company has agreed to pay an
additional finders fee to David Caldwell, John (Daniel) Harmening and Humberto Rafael Pacheco
(the “Finders”) in connection with the efforts of the Finders in introducing the Company to the
Vendors and the La Kika concession. The Finders are at arm’s length to the Company. Subject to
Exchange approval, the Company has agreed to issue a number of common shares equal to 5% of
any common shares issued by the Company on exercise of its option to acquire the La Kika
concession.
On issuance, all common shares will be subject to a hold period of four months plus one day.
Completion of the Principal Transaction remains subject to the Exchange approval . Trading in the
Company’s common shares will remain halted pending further filings with the Exchange. The
Company is working diligently to complete the remaining filings with the Exchange, with a view to
completing the Principal Transaction in short order.
The technical information in this news release has been reviewed by Moira Smith, Ph.D., P.Geo.
who is a Qualified Person as defined by National Instrument 43-101.
For further information, contact Scott Ackerman at [email protected]
On Behalf of the Board of Directors of:
DISCOVERY METALS CORP.
Scott Ackerman
Director
Discovery Metals Corp.
Email: [email protected]
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 release.
Completion of the tra nsaction is subject to a number of conditions, including but not limited to, Exchange
acceptance and if applicable, disinterested shareholder approval. Where applicable, the transaction cannot
close until the required shareholder approval is obtained. There can be no assurance that the transaction will
be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management
information circular or filing statement to be prepared in connection with the transaction, any informat ion
released or received with respect to the transaction may not be accurate or complete and should not be relied
upon. Trading in the securities of the Company should be considered highly speculative. The TSX Venture
Exchange Inc. has in no way passed upo n the merits of the proposed transaction and has neither approved
nor disapproved the contents of this news release.
This news release may include forward-looking statements that are subject to inherent risks and uncertainties.
All statements within this news release, other than statements of historical fact, are to be considered forward
looking. Although the Company believes the expectations expressed in such forward -looking statements are
based on reasonable assumptions, such statements are not guarantees of future performance and actual
results or developments may differ materially from those described in forward-looking statements. Factors that
could cause actual results to differ materially from those described in forward -looking statements include
fluctuations in market prices, including metal prices, continued availability of capital and financing, and general
economic, market or business conditions. There can be no assurances that such statements will prove
accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not
assume any obligation to update any forward-looking statements except as required under applicable laws