FSX Enters into Definitive Agreement for Acquisition of WDR
FSX Enters into Definitive Agreement for Acquisition of
WDR
VANCOUVER, BC
,
July 5, 2023
/CNW/ - Fosterville South Exploration Ltd. ("Fosterville South," "FSX," or the
"Company") (TSXV: FSX) (OTCQX: FSXLF) (
Germany
: 4TU) is pleased to announce that, further to its news release
dated
April 19, 2023
, it has entered into a definitive amalgamation agreement (the "Amalgamation Agreement") with
15103452 Canada Inc., a wholly-owned subsidiary of FSX ("FSX Sub"), and Wild Dog Resources Inc. ("WDR"),
whereby FSX will acquire all of the issued and outstanding common shares of WDR ("WDR Shares") by means of a
"three-cornered amalgamation" (the "Acquisition") whereby FSX Sub and WDR will amalgamate and continue as one
company, as a wholly-owned subsidiary of FSX.
WDR owns and/or has the right to earn an interest in three (3) separate mineral properties located in
Papua New
Guinea
("PNG"): the Wild Dog Project, the Arau Project and the Kesar Creek Project (collectively, the "WDR
Properties") through an Exploration License ("EL") and Exploration License Applications ("ELA").
Highlights:
2166 sq. km land position assembled via the acquisition of interests in a variety of EL and ELAs
includes 614 sq. km project contiguous with and SE of K92 Mining Inc. exploration tenements
includes 130 sq. km project contiguous with and NW of K92 Mining Inc. tenements, 10 km from mining
operations
PNG EL and ELAs will complement FSX's extensive gold land package in
Australia
Bryan Slusarchuk
, CEO of FSX, stated, "We are pleased that the due diligence process has completed and that this
has culminated in the execution of a definitive agreement. With a strong treasury and experienced technical team, we
are in an excellent position to follow up on the solid work done by WDR to date, which has resulted in the definition of
multiple high priority gold and copper drill targets. With a new name proposed, Great Pacific Gold Corp., to better
reflect our regional focus we are also undergoing a rebranding initiative and look forward to the launch of our new
website and related materials alongside a new trading symbol in the weeks ahead."
Terms of the Acquisition
Pursuant to the Amalgamation Agreement, in consideration of WDR:
The shareholders of WDR (the "WDR Shareholders") immediately prior to the closing of the Acquisition (the
"Closing") will receive an aggregate of approximately 16,161,441 common shares of FSX (the "Common Shares"),
and each WDR Shareholder will receive one (1) Common Share for every 7.028 WDR Shares held (the
"Exchange Ratio") (rounded down to the nearest whole number of Common Shares), subject to adjustment. The
Exchange Ratio assumes 113,583,200 WDR Shares are outstanding immediately prior to Closing.
The Common Shares issued to the WDR Shareholders will be subject to voluntary restrictions on resale, of which
33.3% of the Common Shares will not be subject to restrictions on resale, 33.3% of the Common Shares will be
subject to restrictions on resale for a period of three (3) months following Closing and 33.4% of the Common
Shares will be subject to restrictions on resale for a period of six (6) months following Closing.
The warrantholders of WDR immediately prior to Closing (the "WDR Warrantholders") will receive an aggregate of
approximately 526,892 Common Share purchase warrants (the "Warrants"), and each WDR Warrantholder will
receive Warrants exercisable to acquire such number of Common Shares as is equal to the number of WDR
Shares issuable under each such WDR Share purchase warrant (a "WDR Warrant") previously held by such WDR
Warrantholder multiplied by the Exchange Ratio (rounded down to the nearest whole number of Common Shares)
at an exercise price per Common Share equal to the exercise price of such WDR Warrant per WDR Share divided
by the Exchange Ratio until the expiry time of such WDR Warrant.
The optionees of WDR immediately prior to Closing (the "WDR Optionees") will be granted an aggregate of
approximately 1,553,679 stock options of FSX (the "Options"), and each WDR Optionee will be granted Options
exercisable to acquire such number of Common Shares as is equal to the number of WDR Shares issuable under
each such stock option of WDR (a "WDR Option") previously held by such WDR Optionee multiplied by the
Exchange Ratio (rounded down to the nearest whole number of Common Shares) at an exercise price per
Common Share equal to the exercise price of such WDR Option per WDR Share divided by the Exchange Ratio
until the expiry time of such WDR Option.
Immediately prior to Closing, WDR will have a working capital of
C$1,000,000
, excluding payments due prior to
Closing under the agreements relating to the WDR Properties, payments made to satisfy all accrued fees and
termination benefits under the executive compensation agreements and payments of corporate and legal costs in the
ordinary course of business.
On Closing, FSX proposes to appoint
Iain Martin
, a director of WDR, as a director of FSX.
The Acquisition is subject to the approval of the WDR Shareholders, TSX Venture Exchange acceptance and the
satisfaction of other customary conditions.
Information Concerning the WDR Properties
Figure 1. Papua New Guinea Project Location Map
The Wild Dog Project
The Wild Dog Project consists of two ELAs (ELA 2516 and ELA 2761) totalling 1424 sq. km, which are located on the
island of New Britain and are approximately 50 km southwest of Rabaul and Kokopo, PNG.
The Wild Dog Project occurs within a major NNE trending structure of at least 26 km in length which transect apparent
volcanic caldera structures and intrusions. During the Mio-Pliocene at least three volcanic centres, known as the
Nengmutka, Keravat and Sikut calderas, were localised along this horst and graben zone. This structural corridor
constitutes an epithermal and porphyry hydrothermal-magmatic mineralized field.
The Nengmutka Caldera, which hosts the Wild Dog deposit, is characterised by a suite of calc-alkaline andesite
breccia and ash flow tuff known as the Nengmutka Volcanics (Lindley, 1988). This formation has been mapped over an
area of 600 sq. km. Tonalite of the Arabam Diorite intrudes the volcanic sequence and appears to be partly coeval
with the caldera related volcanism.
The precious metal prospects are associated with epithermal type veining that contain gold-silver-telluride (Au-Ag-Te)
mineralisation. Gold and silver occur as native metals and as telluride minerals. Porphyry copper-gold type
mineralization also occurs associated with these intrusion centres that usually underly the epithermal systems. The
whole of the recognised belt is held within the Wild Dog tenements.
Within the central part of the Wild Dog project, a significant structural corridor called the "Wild Dog – Gunsap Corridor"
occurs. The corridor is at least 15 km long and up to 4 km wide and hosts at least three porphyry copper-gold
prospects and several epithermal gold deposits and prospects.
The original Wild Dog epithermal gold deposit occurs within the "Wild Dog – Gunsap Corridor" in the central part of the
tenements. It was discovered in 1983, with exploration including extensive mapping, trenching, rock sampling and
drilling between 1983 and 2005 by various explorers. New Guinea Gold Limited operated a small open pit mining
operation from 2007 and 2011. No exploration has occurred since the closure of the mine.
Figure 2. Wild Dog Project Location and Tenements Maps
Historical work completed by a previous operator returned significant gold assays. Channel sampling at the Kavursuki
Prospect yields
4m
at 9.41 g/t Au and at the Kargalio Vein
6m
at 11.5 g/t Au.
Drilling of the Kavursuki Prospect by previous explorers, located within the Wild Dog Zone and north of the former Wild
Dog mine, also yielded positive high-grade results.
Hole ID
N
E
RL
Depth
Azim
Dip
From (m)
Length (m)
Au g/t
Cu ppm
90KVD005
9490500
395008
787
85.60
101.50
-45.00
5.35
1.25
12.80
1200
90KVD009
9490834
395227
758
93.85
101.50
-45.00
44.65
3.75
11.21
639
10KVD016
9490464
394971
798
51.00
101.50
-50.00
35.44
8.06
6.49
194
10KVD017
9490464
394970
798
50.00
101.50
-65.00
29.08
1.12
33.70
120
11KVD019
9490496
395039
807
45.10
101.50
-60.00
11.10
5.25
9.45
167
11KVD020
9490537
395045
805
50.90
101.50
-50.00
32.45
11.05
3.18
377
11KVD025
9490809
395241
752
45.20
101.50
-50.00
14.75
8.15
18.77
2801
11KVD026
9490810
395272
776
51.70
281.50
-60.00
33.80
5.10
14.70
101
11KVD027
9490870
395252
767
56.10
101.50
-50.00
30.70
1.90
10.35
46
Table 1 – Kavursuki Prospect Significant Drill Intercepts
Apart from the drilling conducted at the former Wild Dog gold mine there remain several drill intercepts that require
further exploration outside of the mine environment as tabulated below, apart from the various trenching and channel
sampling targets.
Hole ID
N
E
RL
Depth
Azim
Dip
From
Length
Au g/t
Cu ppm
86WDD020
9489141
394278
983
259.35
103.50
-60.00
129.35
7.70
5.28
902
87WDD024
9489117
394316
965
152.55
98.50
-60.00
138.25
5.10
8.32
8556
87WDD027
9489115
394325
965
200.40
98.50
-60.00
117.95
6.20
19.13
786
87WDD040A
9489219
394320
994
280.99
103.50
-60.00
148.60
4.20
12.50
4066
87WDD045
9489235
394287
988
300.20
103.50
-60.00
201.30
2.85
16.94
32123
87WDD051
9489249
394257
985
309.10
103.50
-60.00
253.95
6.05
7.29
2054
87WDD058
9489285
394359
977
285.90
101.50
-60.00
147.00
12.45
4.96
6694
87WDD064
9489179
394289
1001
290.60
101.50
-60.00
158.00
14.95
2.73
650
87WDD065
9489160
394330
996
250.10
101.50
-60.00
142.70
4.65
5.49
3246
87WDD069
9489139
394375
991
123.50
101.50
-60.00
88.55
7.75
7.12
7151
08WDD111
9489393
394513
906
100.00
281.50
-60.00
48.40
7.10
5.47
931
85WDD014
9488708
394260
954
86.20
113.50
-51.00
48.25
5.25
9.79
10863
86WDP010
9488839
394302
909
60.00
83.50
-60.00
34.00
6.00
6.71
5047
87WDD040A
9489219
394320
994
280.99
103.50
-60.00
164.55
13.50
8.56
3056
90WDD086
9488948
394337
890
79.00
78.50
-50.00
18.45
11.25
16.22
3473
97WD098
9489389
394487
905
39.00
98.50
-45.00
12.00
8.00
9.73
NA*
Table 2 – Wild Dog Prospect Area Significant Drill Intercepts
NA* - not assayed or not available.
Hole ID
North
East
RL
Depth
Azim
Dip
From
Length
Au g/t
Cu ppm
MRC01
9487963
393871
968
20.00
0.00
-90.00
2.00
18.00
3.05
3084
MRC02
9487978
393874
971
30.00
0.00
-90.00
0.00
18.00
3.07
1053
90WDD087
9488091
394082
1021
61.95
101.50
-50.00
7.30
1.35
5.02
1650
90WDD088
9488104
394070
1023
40.30
101.50
-50.00
21.30
1.55
3.95
25
MMD003
9486870
393532
924
104.00
133.00
-50.00
2.35
4.42
NA*
MMD006
9486770
393479
945
122.05
133.00
-50.00
2.55
4.16
NA*
Table 3 – Mengmut Prospect Significant Drilling Intercepts
Additionally, multiple samples collected from a historic stockpile near the Wild Dog Zone returned bonanza grades of
gold and copper including Sample 30104 which assayed 242 g/t Au, 601 g/t Ag, 9.52% Cu and Sample 68001 which
assayed 122.5 g/t Au, 350 g/t Ag and 11% Cu.
Figure 3. NE-trending Wild Dog - Gunsap structural corridor strongly coincident with equidistant intrusives and
caldera features.
Figure 4. Historic exploration data at Wild Dog Project.
The exploration program at the Wild Dog Project will initially focus on drilling the copper-gold Magiabe porphyry target
as well as testing the potential existence of an arrowhead intrusion complex at depth beneath the Wild Dog zone
(Figure 4).
Figure 5. Schematic section for Wild Dog Zone, illustrating location of potential "Arrowhead Intrusive Complex".
WDR has entered into the following agreements to acquire its interest in ELA 2516:
(A)
Option agreement dated December 19, 2019, as amended on December 19, 2019 (the "Munga River Option Agreement"), between WDR and Munga River Ltd.("Munga River").
Pursuant to the Munga River Option Agreement, WDR may acquire up to a 100% interest in ELA 2516 as follows:
(i)
an initial 80% interest in ELA 2516 (the "First Munga River Option"), once ELA 2516 is converted into an EL and renewed after its first two (2) year term; and
(ii)
up to an additional 20% interest (for an aggregate 100% interest) in ELA 2516 (the "Second Munga River Option"), by the later of (a) 6 years following the listing of WDR or its nominee (the "Listing")
and (b) 18 months following the initial grant of EL 2516.
In order to maintain and exercise the First Munga River Option, WDR is required to pay and issue to Munga River:
(i)
C$10,000 in cash within 15 business days following the execution of the Munga River Option Agreement (which amount has been paid);
(ii)
C$2,500 in cash per month commencing the first month following the execution of the Munga River Option Agreement until the 72-month anniversary of the later of (a) the Listing and (b) the 18-month
anniversary of the grant of ELA 2516;
(iii)
C$3,500 in cash per month commencing on the date of grant of ELA 2516 until the listing of WDR (which payments will cease on Closing);
(iv)
C$25,000 in cash within 20 business days following the grant of ELA 2516;
(v)
C$275,000 in cash within 10 business days following the Listing;
(vi)
C$550,000 in shares within 10 business days following the Listing at a price equal to the lesser of (a) the price of the last financing of WDR or its nominee prior to the Listing and (b) the Listing price;
(vii)
C$250,000 in cash within 20 business days following the later of (a) the 36-month anniversary of the Listing and (b) the renewal of ELA 2516 (C$20,000 of which has been paid); and
(viii)
C$250,000 in shares within 30 business days following the later of (a) the 36-month anniversary of the Listing and (b) the renewal of ELA 2516.
In order to maintain and exercise the Second Munga River Option, WDR is required to pay and issue to Munga River:
(i)
C$700,000 in cash within 30 business days following the 48-month anniversary of the Listing;
(ii)
C$300,000 in shares within 30 business days following the 48-month anniversary of the Listing;
(iii)
C$1,400,000 in cash within 40 business days following the 72-month anniversary of the Listing; and
(iv)
C$600,000 in shares within 30 business days following the 72-month anniversary of the Listing.
Unless otherwise described, the shares described above will be issued at the volume weighted average price ("VWAP") for the 20 trading days immediately prior to the date of each such share issuance.
Upon WDR's exercise of the First Munga River Option, WDR will grant to Munga River (or pro rata to the shareholders of Munga River) a 2% net smelter return royalty in respect of ELA 2516 (the "Munga River
Royalty"). WDR will have the right to acquire one-half (1/2) of the Munga River Royalty, being a 1% net smelter return, at any time prior to the commencement of commercial production with the payment and
issuance by WDR of:
(i)
C$625,000 in cash to Munga River; and
(ii)
C$625,000 in shares to Munga River or its nominee at a price per share equal to the 30-day VWAP immediately prior to the date of commercial production,
within 30 business days following the commencement of commercial production.
Pursuant to or in connection with the Munga River Option Agreement, WDR will also pay and issue C$150,000 in shares to Koiti Mel following the Listing at a price equal to the lesser of (a) the price of the most
recent financing of WDR or its nominee prior to the Listing and (b) the Listing price.
(B)
Agreement dated December 19, 2019 (the "Aphrodite Agreement") among WDR, EEPL and the trustee of the Aphrodite Trust ("Aphrodite").
WDR entered into the Aphrodite Agreement whereby Aphrodite agreed to withdraw all legal claims relating to its 10% interest in the Historic Tenements.
Pursuant to the Aphrodite Agreement, WDR is required to pay to Aphrodite:
(i)
C$5,000 in cash within 15 business days following the execution of the Aphrodite Agreement (which amount has been paid);
(ii)
C$10,000 in cash within 30 business days following the grant of ELA 2516;
(iii)
C$112,500 in cash within 10 business days following the Listing;
(iv)
C$122,500 in cash within 10 business days following the 12-month anniversary of the Listing; and
(v)
C$10,000 in cash within 30 business days following the grant of the EL pursuant to ELA 2516.
(C)
Agreement dated May 30, 2022 (the "NGGL Agreement") between WDR and NGGL (in liquidation).
WDR entered into the NGGL Agreement whereby NGGL agreed to withdraw all legal claims relating to the Historic Tenements.
Pursuant to the NGGL Agreement, WDR is required to pay and issue:
(i)
C$50,000 in cash to NGGL's liquidator (the "NGGL Liquidator") (which amount has been paid);
(ii)
C$75,000 in cash to the NGGL Liquidator within 10 business days following the notification of the lifting of a certain court injunction (which amount has been paid);
(iii)
C$325,000 in cash to the NGGL Liquidator within 20 business days following the grant of the EL pursuant to ELA 2516;
(iv)
an aggregate of C$400,000 in shares to the NGGL Liquidator (or such other parties as the NGGL Liquidator may designate) on the Listing date at the Listing price; and
(v)
K10,000 in cash to Warner Shand, in respect of legal costs, within 10 business days following the notification of the lifting of a certain court injunction or upon WDR receiving notification that the NGGL
Liquidator has lodged the formal notice of termination of all legal claims by NGGL and has consented to the lifting of such injunction (which amount has been paid).
The Arau Project
The Arau Project consists of one EL (EL 2651) and one ELA (ELA 2715), located in the Kainantu region,
Eastern
Highlands Province
, PNG, which are immediately east of and adjoining the Kainantu gold mine owned by K92 Mining
Inc.
Initial exploration work by previous operators has identified two potential deposit types at the Arau Project:
epithermal-high sulphidation gold (Sabudia Hill, Onga Hill and Erandora prospects) and
copper-gold porphyry prospects (Mt.
Victor, Mt.
Aiyonka, Ebitara and P1 prospects).
Within the licence area, the Mt. Victor Prospect (copper-gold porphyry target) covers an area of
800m
by
400m
, and
previous drilling suggests that the prospect area is a multiple phase intrusive complex that is copper and gold
mineralized. It is a drill ready prospect in which previous channel sampling has identified the following strong gold
grades:
38m
@ 2.64 g/t Au
12m
@ 5.5 g/t Au
18m
@ 2.4 g/t Au
10m
@ 3.7 g/t Au.
These channel samples are in the central part of the Mt Victor prospect southwest of the former Mt Victor gold mine.
Previous drilling was carried out in the 1980s, and all drillholes presented were vertical, which may not have been
appropriate for the subvertical fault zones present within the prospect.
Hole ID
E*
N*
Dept
h
From
(m)
Length
(m)
Au
g/t
Cu
ppm
Notes
CRD58
385177
9291680
64.5
0
64.5
0.18
106
granodiorite intruded by diorite
DDH89
-1
384650
9291308
260
234
5
0.85
NA
visible disseminated copper
mineralization
DDH89
-2
384965
9291825
300
43
10
1.10
NA
under review
DDH89
-3
384873
9291562
300
213
10
1.20
NA
under review
MVD07
384746
9291253
52.8
0
52.8
0.10
384
altered pyritic diorite
MVD08
384831
9291327
30
16
14
0.19
373
argillic altered QFP
MVD09
384853
9291333
36
34
2
0.29
NA
epidote altered intrusive
MVD20
384900
9291345
75
0
75
0.34
304
argillic altered brecciated porphyry
MVD21
384890
9291353
48
0
48
0.41
329
diorite/QFP brecciated contact
MVD36
385032
9291456
24
22
2
14.70
463
altered pyritic porphyry
MVD40
384994
9291435
38
0
38
3.10
1400
silica epidote altered porphyry
MVD46
384932
9291388
34.5
15
19.5
0.33
117
epidote pyrite altered porphyry
MVD50
385068
9291469
29
16
13
0.13
722
clay altered granodiorite
MVD52
384962
9291475
30
14
16
1.01
77
sericite epidote altered porphyry
MVD62
384704
9291152
75
40
35
0.12
287
kspar epidote altered porphyry
MVD63
384596
9291160
48
0
48
0.75
373
diorite intruded by pyritic porphyry
Table 4 – Mt Victor Prospect Significant Drill Intercepts
Initial drilling at the Arau Project will involve five angled diamond drill holes to follow up on a successful electromagnetic
survey and previous excellent geochemical sampling results.
Figure 6. Mt Victor Prospect Map with proposed drill sites
WDR entered into a Share Purchase and Financing Agreement dated
January 10, 2021
(the "Share Purchase and
Financing Agreement") with Taha Sanduhu ("Sanduhu") and Ontaga Resources Ltd. ("Ontaga"), pursuant to which
WDR may acquire up to an aggregate 85% interest in Ontaga, a PNG Company, which holds EL 2651 and ELA 2715.
Pursuant to the Share Purchase and Financing Agreement, WDR may acquire up to an 85% interest in Ontaga as follows:
(i)
an initial 25% interest in Ontaga (the "First Ontaga Option"), by paying to Sanduhu C$150,000 in cash and paying K217,000 in cash for certain historical expenses and ongoing administrative expenses of
Ontaga (which amounts have been paid); and
(ii)
an additional 60% interest in Ontaga (for an aggregate 85% interest in Ontaga) (the "Second Ontaga Option"), by paying to Sanduhu C$390,000 in cash on or before the later of the renewal dates for EL
2651 and ELA 2715.
Upon WDR acquiring the First Ontaga Option, WDR will pay the following:
(i)
K28,000 in cash for annual accounting and administrative expenses (which amount has been paid);
(ii)
K1,500 in cash per week for other expenses over a period of 24 months (which amounts have been paid);
(iii)
K50,000 in cash towards the completion of a medical clinic located near the village of Arau and the employment of the services of a nurse during the 12 months following the completion of the First Ontaga
Option (which amount has been paid);
(iv)
K50,000 in cash for employment services for the 24 months following the completion of the First Ontaga Option;
(v)
C$30,000 in cash to Sanduhu within 30 business days following the completion of the First Ontaga Option (which amount has been paid); and
(vi)
C$3,000 in cash to Sanduhu per month until completion of the Second Ontaga Option.
Upon WDR acquiring an 85% interest in Ontaga, WDR will be solely responsible for funding explora on ac vi es and other expenditures at the Arau Project. However,
Ontaga will be required to pay to WDR 80% of earnings or dividends that Sanduhu would be en tled to receive un l such me as the amounts so received equal the
aggregate amount of expenditures incurred by WDR that would have been payable by Sanduhu.
The Arau Project is subject to a 2% net smelter return royalty (the "Arau Royalty") in favour of TPS Consulting Pty Ltd
("TPS"). Ontaga may purchase from TPS one-half (1/2) of the Arau Royalty, being a 1% net smelter return, at any
time, for
C$1,000,000
in cash.
The Kesar Creek Project
The Kesar Creek Project consists of one ELA, ELA 2711, and is located 10 km from the Kora gold deposit owned by
K92 Mining Inc.
Exploration at Kesar Creek has identified the presence of semi-massive copper sulphides associated in quartz veins
paralleling the Kora gold deposit as well as the potential for a copper-gold porphyry deposit. Although limited
exploration has been carried out at Kesar Creek, initial rock sampling programs returned high-grade gold-copper-silver
values including:
Rock sample no 14128 at 11.5 g/t Au
Rock sample no A1428 at 11.9 g/t Au
Rock sample no 9231F at 10.6 g/t Au
Rock sample no 14236 at 11.6 g/t Au, 29 g/t Ag, 0.036% Cu and 20 ppm Mo
Rock sample no. A14023 at 30.4 g/t Au, 240 g/t Ag, 0.13% Cu, and 24 ppm Mo
Figure 7. Historic exploration data at Kesar Creek project showing trench, soil and rock assay results with key
geological features previously mapped by Highlands Gold Ltd. and Barrick PNG Ltd.
WDR entered into a project and investment agreement dated
April 5, 2023
(the "Project and Investment Agreement")
with
Andy Thomas
("Thomas") and Yaendal Minerals Limited ("Yaendal"), pursuant to which WDR has agreed to
acquire a 90% interest in Yaendal, a PNG company, which holds ELA 2711.
In order to earn a 90% interest in Yaendal, WDR is required to pay:
(i)
C$5,000 in cash to Thomas' consulting company on or before the execution of the Project and Investment Agreement (which amount has been paid);
(ii)
C$20,000 in cash to Thomas' consulting company on the business day following the execution of the Project and Investment Agreement (which amount has been paid);
(i)
C$100,000 in cash to Yaendal's trust account on or before May 1, 2023 (which amount will be paid by WDR prior to Closing);
(ii)
C$100,000 in cash to Thomas' consulting company on Closing;
(iii)
C$100,000 in cash to Thomas' consulting company on or before the 12-month anniversary of Closing; and
(iv)
C$100,000 in cash to Thomas' consulting company on or before the 24-month anniversary of Closing.
WDR will be solely responsible for funding exploration activities and other expenditures at the Kesar Creek Project. However, Yaendal will be required to pay to WDR 100% of the earnings or dividends that Thomas
would be entitled to receive until such time as the amounts so received equal the aggregate amount of expenditures incurred by WDR that would have been payable by Thomas.
The Kesar Creek Project is subject to a 2% net smelter return royalty in favour of Thomas (the "Kesar Creek Royalty"). Yaendal may purchase from Thomas one-half (1/2) of the Kesar Creek Royalty, being a 1%
net smelter return, at any time, for C$1,500,000 in cash.
Pursuant to the Project and Investment Agreement, WDR will also issue and pay:
(i)
4,500,000 WDR shares (or 640,295 FSX Shares) to Thomas or his nominee on the later of (a) May 31, 2023 and (b) within 20 business days following the grant of the EL pursuant to ELA 2711; and
(ii)
C$5,000 in cash per month to Thomas' consulting company for a period of six (6) years following the execution of the Project and Investment Agreement (which payments have been made to date).
About FSX
Fosterville South began with two, 100% owned, high-grade gold projects called the Lauriston and Golden Mountain
Projects, and has since acquired a large area of granted and application tenements containing further epizonal (low-
temperature) high-grade gold mineralisation called the Providence Project and a large group of recently consolidated
license tenement applications called the Walhalla Belt Project, which contains a variety of epizonal and intrusion related
style gold mineralisation, all in the state of Victoria, Australia. The Fosterville South land package, assembled over a
multi-year period, notably includes a 600 sq. km property immediately to the south of and within the same geological
framework that hosts Agnico Eagle's Fosterville epizonal gold tenements. Additionally, Fosterville South has gold-
focused projects called the Moormbool and Tallangallook, which are also located in the state of Victoria, Australia.
Moormbool project has epizonal style gold mineralisation, and Tallangallook has mesozonal and intrusion relation gold
mineralisation.
All of FSX's properties, with the possible exception of Moormbool, have had historical gold production from hard rock
sources despite limited modern exploration and drilling.
Recently, Fosterville South entered into an agreement with WDR to acquire a significant 2,166 sq. km mineral
exploration land package in PNG (as described in the FSX News Release dated
April 19, 2023
).
The land package included in the acquisition comprises an EL and multiple ELAs. It includes both early-stage and
advanced-stage exploration targets with high-grade epithermal vein and porphyry-style mineralisation present.
The Arau Project consists of one EL, EL 2651, and one ELA, ELA 2715, located in the Kainantu region, and includes
the Mt. Victor Prospect, where previous drilling found multiple phase intrusive complexes of copper and gold
mineralisation.
The Wild Dog Project consists of two ELAs, ELA 2516 and ELA 2761, located on the island of New Britain and about
50 km southwest of Rabaul and Kokopo, PNG.
The Kesar Creek Project consists of one ELA (ELA 2711), and is located 10 km west of the Kainantu Gold Mine
owned and operated by K92 Mining Inc.
WDR has done significant work on various projects in the past two years, generating multiple high priority drill targets.
Qualified Person
The technical content of this news release has been reviewed, verified and approved by WDR director,
Chris Muller
,
PGeo, a Qualified Person under the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral
Projects. Mr. Muller is responsible for the technical content of this news release and has spent time onsite reviewing
sampling results as well as discussing work programs and results with geology personnel and external consultants.
On behalf of FSX
Rex Motton
Chief Operating Officer and Director
Forward-Looking Statements
Information set forth in this news release contains forward-looking statements that are based on assumptions as of the
date of this news release. These statements reflect management's current estimates, beliefs, intentions and
expectations. They are not guarantees of future performance. Fosterville South cautions that all forward looking
statements are inherently uncertain and that actual performance may be affected by many material factors, many of
which are beyond their respective control. Such factors include, among other things: risks and uncertainties relating to
Fosterville South's limited operating history, its exploration and development activities on the Lauriston,
Golden
Mountain
,
Providence
and Beechworth Properties and the need to comply with environmental and governmental
regulations. Accordingly, actual and future events, conditions and results may differ materially from the estimates,
beliefs, intentions and expectations expressed or implied in the forward looking information. Except as required under
applicable securities legislation, Fosterville South does not undertake to publicly update or revise forward-looking
information.
Neither 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 release.
View original content to download multimedia:
https://www.prnewswire.com/news-releases/fsx-enters-into-definitive-agreement-for-acquisition-of-wdr-301870027.html
SOURCE
Fosterville South Exploration Ltd.
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/July2023/05/c7394.html
%SEDAR: 00048753E
For further information:
Adam Ross, Investor Relations, Direct: (604) 229-9445, Toll Free: 1(833) 923-3334, Email:
CO: Fosterville South Exploration Ltd.
CNW 08:00e 05-JUL-23