Emgold Completes Assignment Agreement Allowing IT to Acquire up to a 91% Interest IN the CASA South Property, Quebec
EMGOLD MINING CORPORATION
Suite 1015 – 789 West Pender Street
Vancouver, B.C. V6C 1H2
www.emgold.com
December 13, 2018 TSX Venture Exchange : EMR
OTC : EGMCF
Frankfurt Exchange : EMLN
EMGOLD COMPLETES ASSIGNMENT AGREEMENT
ALLOWING IT TO ACQUIRE UP TO A 91% INTEREST
IN THE CASA SOUTH PROPERTY, QUEBEC
Vancouver, British Columbia - Emgold Mining Corporation (TSXV: EMR) (“Emgold” or the
“Company”) announces it has completed an assignment agreement (the “Assignment Agreement”) with
a third party, a privately held company, (the “Assignor”) granting Emgold (the “Assignee”) its rights,
held through a binding Letter of Intent (“LOI”) with Greg Exploration Inc. and Affiliates (the
“Vendors”), to acquire up to a 91% interest in the Casa South Property, Quebec (the “ Property”), as
more fully described below. Closing of the transaction (“Transaction”) is subject to various conditions,
including but not limited to completion of a definitive option agreement (“Definitive Agreement ”)
between Emgold and Vendors and TSX Venture Exchange (“Exchange”) approval. All c urrency
amounts in this press release are in $CDN. The Transaction is an arms-length transaction.
The Property comprises 180 active mining titles covering a total of 10,061 hectares (100 square
kilometers). It extends immediately south of Hecla Mining Corporation’s Casa Berardi Mine operation
and extends laterally for 20 k ilometers covering different sub -parallel structures corresponding to a
distinct geophysical signatures and hosting elevated gold values in soil anomalies.
Casa Berardi Mine has pro duced approximately 1.9 million recovered gold ounces since commencing
production in 1988, including 931,244 recovered ounces since production started in 2006 (Source: Hecla
Mining Corporation website). Note that the presence of mineral resources and reserves found on the Casa
Berardi Mine Property do not guarantee discovery or delineation of of mineral resources and reserves on
the Casa South Property.
David Watkinson, President and CEO of the Company stated, “This is a n exciting and strategic property
acquisition for the Company given its location adjacent to Casa Berardi Mine . Emgold management
believes there is excellent potential for discovery of mineralization on the Property based on historic and
recent exploration done by others.”
Terms of the Assignment Agreement
Pursuant to the Assignment Agreement, Emgold has agreed to acquire the rights, held through the LOI
executed between the Assignor and the Vendors , in exchange for 2,000,000 common shares of the
Company (the “Shares”) to be issued to the Assignor, granting Emgold the option to acquire up to a 91%
interest in the Property . The Shares to be issued to the Assignor will be subject to a minimum statutory
hold period of 4 months from the date of issue.
Terms of the Letter of Intent
Emgold’s assumption of the rights held through the LOI allows Emgold the option to acquire up to a 91%
interest in the Property under the following terms. During the option period (the “ Option Period ”),
Emgold will be required to make cash payments to the Vendors as shown in Table 1.
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Table 1
Payments to the Vendors During the Option Period
Timing of Cash Payment Payment $CDN
Closing of the Transaction $75,000
Year 1 Anniversary of the Definitive Agreement $75,000
Year 2 Anniversary of the Definitive Agreement $75,000
Year 3 Anniversary of the Definitive Agreement $75,000
Year 4 Anniversary of the Definitive Agreement $75,000
Total $375,000
Emgold will be required to complete $600,000 in exploration expenditures (“ Exploration
Expenditures”) in Year One of the Option Period. Emgold will be required to make an additional
$1,000,000 in Exploration Expenditures during the course of the Definitive Agre ement, without any
commitment as to amount and timing of amount to be spent. Exploration Expenditures shall include, but
not be limited to, cash payments made to the Vendors, claim fees, property taxes, exploration
expenditures, permitting expenditures, reclamation expenditures, payments made to First Nations, holding
costs, legal costs, and reasonable administrative costs. Excess expenditures, made in a given year, will be
credited to future years of exploration of the Property.
Emgold shall have the ri ght to accelerate the exercise of the Option and consequently reduce the Option
Period by concurrently accelerating the aforementioned cash payments and Exploration Expenditures.
Should Emgold decide to accelerate such cash payments and Exploration Expendi tures, Emgold will be
entitled to a 20% discount on the contemplated annual cash payments to be made , as described
hereinabove.
For the purpose of the Transaction, Emgold will establish a subsidiary company (the “ Subsidiary
Company”), being understood that such Subsidiary Company shall become the beneficial owner of the
LOI and, upon its completion, the Definitive Agreement. Upon establishing the Subsidiary Company, the
Property will be transferred into the name of the Subsidiary Company.
The Vendors will be allocated a number of common shares (“Subsidiary Shares”) in the share capital of
the Subsidiary Company equal to 9% of the then issued and outstanding share capital of said Subsidiary
Company. The Vendors’ Subsidiary Share al location in the share capital of the Subsidiary Company
shall be increased should Emgold not complete the total amount of Exploration Expenditures of
$1,600,000 in the following manner:
i. If Exploration Expenditures spent on the Property are totaling $1,60 0,000, the Vendors shall
be entitled to the prescribed nine percent (9%) allocation of Subsidiary Shares in the
Subsidiary Company;
ii. If Exploration Expenditures spent on the Property are totaling $1, 100,000, the Vendors shall
be entitled to an increase d fourteen percent (14%) allocation of Subsidiary Shares in
Subsidiary Company; and
iii. If Exploration Expenditures spent on the Property are totaling $600,000, the Vendors shall be
entitled to an increased nineteen percent (19%) allocation of Subsidiary Shares in Subsidiary
Company.
Prior to completion of the Option, the Subsidiary Shares held by the Vendors shall be non -dilutable.
Following completion of the Option, the Subsidiary Shares shall become dilutable. Emgold shall have
first right of refusal to acquire any Subsidiary Shares from the Vendors, should they elect to sell them.
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Emgold shall grant to the Vendors a 1.5% Net Smelter Royalty (“ NSR”) on the Property, being agreed
that half a percent (0.5%) of said NSR c an be repurchased by the Subsidiary Company, as applicable, for
an amount of five hundred thousand dollars ($500,000).
About the Casa South Property
The Property is located approximately 80 kilometers north of the town of La Sarre, Quebec or 105
kilometers west south -west of Matagami in the Casa Berardi township, James Bay Municipality. It is
located south of the Casa Berardi Mine, owned and operated by Hecla Mining Corporation. It is
accessible going north from La Sarre via Casa Berardi Mine’s all season gravel road. The Property
consists of 180 active mining titles covering a total of 10,061 hectares. The claims are in one contiguous
block.
The Property encompasses a lithologic context similar to the Cass Berardi deposit. Its exploration history
followed the same stages of evolution over a period of time from the 1960 to 1990 where exploration
focued sulfide rich polymetallic deposits similar to the Kidd Creek, Selbaie, or Mattagami deposits
discovered in the northern pa rt of the Abitibi belt. Exploration work on the claims was done by
companies such as Newmont, Noranda, and Cambior, among others.
Following the discovery of gold close to the Casa Berardi fault in 1981, various geophysical surveys were
done on the Property as well as soil and rock chip sampling and drilling looking for similar targets. The
historical gold potential appears to be located inside the Kama faults and related anomalies corresponding
to a three kilometer by two kilometer area where disseminate d pyrite and arsenopyrite concentrations
were found in carbonated andesite along flow contacts. Over a period of 45 years, about 23,000 meters of
drilling was done on the Property in 47 drill holes. The Vendors have compiled a significant database of
information and conducted recent geophysics work that will aid Emgold in its exploration efforts.
About Emgold
Emgold is a Vancouver based gold exploration and mine development Company with exploration
properties located in the Quebec, Nevada, and British Co lumbia. These include the Golden Arrow,
Buckskin Rawhide East, Buckskin Rawhide West, and Koegel Rawhide properties in Nevada, and the
Stewart and Rozan properties located in British Columbia. The Company recently acquired the Troilus
North property in Quebec and subsequently vended it to Troilus Gold Corporation for 3.75 million shares
and $250,000 in cash. The Company also just announced a Letter of Intent to acquire the Marietta
Property in Nevada.
Alain Moreau, P.GEO. , a qualified person under the NI 43-101 instrument, has reviewed and approved
the content of this press release.
On behalf of the Board of Directors
David G. Watkinson, P.Eng.
President & CEO
For further information, please contact:
David G. Watkinson, P.Eng.
Tel: 530-271-0679 Ext 101
Email: [email protected]
Neither TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
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Cautionary Note on Forward-Looking Statements
This news release contains forward -looking statements and forward -looking information (collectively, "forward -looking
statements") within the meaning of applicable Canadian and U.S. securities legislation, including the United States Private
Securities Lit igation Reform Act of 1995. All statements, other than statements of historical fact, included herein including,
without limitation, statements regarding the anticipated results from exploration activities, the discovery and delineation o f
mineral deposit s/resources/reserves and the anticipated business plans and timing of future activities of the Company, are
forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that
such expectations will prove to be correct. Forward -looking statements are typically identified by words such as: "believe",
"expect", "anticipate", "intend", "estimate", "postulate" and similar expressions, or are those, which, by their nature, refe r to
future events.
The Company cautions investors that any forward -looking statements made by the Company are not guarantees of future results
or performance, and that actual results may differ materially from those in forward -looking statements as a result of various
factors, including potential acquisition of the Casa South and Marietta Properties , further exploration, development, or mining
activities on the Casa South, the Marietta, or its other Properties, operating and technical difficulties in connection with mineral
exploration and development activities, the estimation or realization of mineral reserves and mineral resources, the timing and
amount of estimated future production, the costs of production, capital expenditures, the costs and timing of the development of
new dep osits, requirements for additional capital, future prices of precious metals, changes in general economic conditions,
changes in the financial markets and in the demand and market price for commodities, labour disputes and other risks of the
mining industr y, delays in obtaining governmental approvals, permits or financing or in the completion of development or
construction activities, changes in laws, regulations and policies affecting mining operations, title disputes, the inability of the
Company to obtai n any necessary permits, consents or authorizations required, including TSX Venture Exchange acceptance of
any other current or future property acquisitions or financings and other planned activities, the timing and possible outcome of
any pending litigati on, environmental issues and liabilities, and risks related to joint venture operations, and other risks and
uncertainties disclosed in the Company's latest interim Management's Discussion and Analysis and filed with certain securitie s
commissions in Canada. The Company's Canadian public disclosure filings may be accessed via www.sedar.com and readers are
urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.
The Company does not undertake to update any forward -looking information provided in this press release or Management's
Discussion and Analysis , except as, and to the extent required by, applicable securities laws. For more information on the
Company and its business, investors should review the Company’s annual information form and other regulatory filings filed
with securities commissions or similar authorities in Canada that are available on SEDAR at www.sedar.com. The Company
reviews its forward-looking statements on an ongoing basis and updates this information when circumstances require it.
Readers are cautioned not to place undue reliance on forward -looking statements. The Company undertakes no obligation to
update any of the forward -looking statements in this news release or inco rporated by reference herein, except as otherwise
required by law.