Ardonblue Options Two Projects
Ardonblue Ventures Inc.
15444 Royal Avenue, White Rock, BC V4B 1N1
Mailing address: PO Box 48838, Bentall Centre Station, Vancouver, BC V7X 1A8
[email protected] Tel: (604) 408-1990 Fax: (604) 608-4822
NEWS RELEASE
Ardonblue Options Two Projects
Vancouver, B.C. – March 15, 2017 – Ardonblue Ventures Inc. (the “Company” or
“Ardonblue”) (TSX-V: ARB.H) is pleased to announce that it has entered into two separate
letter agreements with J2 Syndicate Holdings Ltd. (the “Syndicate”) and its members (the
“Optionors”) providing the Company with the option to acquire, subject to a net smelter
return royalty, a 100% interest in a mineral project consisting of 9,739.94 hectares or 299
units situated in the Omineca Mining District (the Empire Project) and an option to acquire,
subject to a net smelter return royalty, a 100% interest in a mineral project consisting of
13,445.09 hectares or 412 units situated in the Skeena Mining District (the “Midas Project”).
The letter agreements are to be superseded by Definitive Agreements in due course.
In order to keep each of the options (collectively the “Options”) in good standing the
Company is required to make initial payments of $300,000 on each property
and annual cash payments totalling $3.4 million for each Option over a ten year period of
which the first payment of $300,000 is obligatory, the second year payment of $300,000 due
on May 1, 2018 is optional and each subsequent annual payment of $500,000 due on May
1 of each year is optional and will be credited as advance royalty payments. On the
Effective Date the Company is also required to issue 8.2 million units (“Units”) for each of
the Options to the Optionors at a deemed price of $0.06 per Unit, each Unit being
comprised of one share plus one share purchase warrant entitling the holder to purchase
one share of the Company for $0.08 for a period of five years. All warrants will be subject to
provisions prohibiting exercise if, as a result, the holder would hold 10% or more of
Ardonblue’s outstanding shares post-exercise. In addition, the warrants will be held in
escrow by the solicitors for Ardonblue and will be released ratea bly in tranches as, when
and if the exercise of the warrants released from escrow, together with all shares issued to
the Optionors on the Effective Date and then owned by the Optionors, would not result in
the Optionors, as a group, holding more than 49.9% of the outstanding shares of Ardonblue;
In order to keep each of the Options in good standing the Company is also required to issue
4.1 million shares to the Optionors at the beginning of May in each of the second, third and
seventh years. The Company is required to make exploration expenditures of $350,000 on
the Midas Project and $450,000 on the Empire Project in the first year and to keep each of
the Options in good standing thereafter is required to make subsequent annual
expenditures of $500,000; $1 million, $1.5 million, $2 million, $3 million and $5 million with
the requirement in year eight to elect by May 1, 2024 to produce a feasibility report by May
1, 2027. The requirement to produce each of the feasibility reports by May 1, 2027 is
subject to the Company obtaining in each case: (a) an extension to December 15, 2027 by
paying the Optionors US$1 for every additional equivalent ounce of gold in excess of 2
million equivalent ounces of gold established in accordance with NI 43-101 resource reports
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15444 Royal Avenue, White Rock, B.C. V4B 1N1
Mailing address: PO Box 48838, Bentall Centre Station, Vancouver, BC V7X 1A8
[email protected] Tel: (604) 408-1990 Fax: (604) 608-4822
(“Resource Reports”) produced prior to the feasibility report, or (b) by making, until it does
produce a feasibility report, annual payments (each one year period being an “Extension
Term”) to the Optionors of: (i) US$1 million in each of the first five Extension Terms; (ii)
US$2 million in each of the sixth through the tenth Extension Terms; and (iii) US$3 million in
each succeeding Extension Terms. If the Company elects to produce a feasibility report
such election becomes an obligation to produce it by May 1, 2027 failing which, subject to
obtaining an extension, the Company will be required to pay $1 million to the Optionors as
liquidated damages for failure to produce a feasibility report.
In addition to the cash, Units and exploration expenditure c ommitments required, the
Company is also required, on the Effective Date (being the date which is three days after
the TSX Venture Exchange accepts the Definitive Agreements for filing or otherwise
consents to the completion of the Options) to pay the aggregate of $500,000 to acquire a
20% interest in a new exploration syndicate to be known as “The J2B Syndicate”.
Pursuant to each of the Options the Company is required to pay the Optionors a resource
bonus of US$1 million and 10 million shares as and when NI 43-101 mineral reserves and
mineral resources collectively meet 2 million equivalent ounces of gold on the respective
properties and thereafter the Company is required to pay US$1 per additional equivalent
ounce of gold based on subsequent Resource Reports.
A 3% royalty (“Royalty”) on net smelter returns (“NSR”) from all production from each
property acquired by Ardonblue will be payable in cash or in kind at the option
of the Optionors, with a right of Ardonblue until May 1,2021 to buy down the Royalty by 1%
to 2% for the payment to the Optionors of US$2,000,000. If the price of gold increases to
US$2,000 per ounce, the Royalty will increase to 4% if it has not previously been
bought down to 2% and it will increase to 3% if it has previously been bought down. If the
Royalty is at 4% Ardonblue may reduce it to 2% by the payment of US$4,000,000 to
the Optionors by the date which is the later of the 7th anniversary of the Definitive
Agreement or six months after the price of gold reach es the US$2,000 threshold. If the
Royalty is at 4% Ardonblue may reduce it to 3% by the payment of US$2,500,000 to
the Optionors by the date which is the later of the 7th anniversary of the Definitive
Agreement or six months after the price of gold reaches the US$2,000 threshold.
Ardonblue must have a minimum of $2,400,000 cash on deposit by April 30, 2017, net of all
liabilities, as a condition precedent to the grant of the Options and must write off $95,391,00
in debt and also settle up to $330,000 of debt at $0.06 per share by the issuance of up to
5,500,000 shares
Closing of the proposed transactions is subject to TSXV acceptance of a filing required to
be made in respect of th e Options and the shares for debt and all other necessary
regulatory approvals and acceptances, as well as the other conditions precedent.
On behalf of the Board of Directors
“Clive Brookes”
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15444 Royal Avenue, White Rock, B.C. V4B 1N1
Mailing address: PO Box 48838, Bentall Centre Station, Vancouver, BC V7X 1A8
[email protected] Tel: (604) 408-1990 Fax: (604) 608-4822
Clive Brookes
CEO, President and Director
Neither the 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.
Certain disclosure in this release may constitute forward-looking statements that are subject
to numerous risks and uncertainties relating to Ardonblue’s operations that may cause
future results to differ materially from those expressed or implied by those forward -looking
statements, including its ability to complete the contemplated private placement. Reader s
are cautioned not to place undue reliance on these statements. NOT FOR
DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS OR FOR
DISTRIBUTION TO U.S. NEWSWIRE SERVICES. THIS PRESS RELEASE DOES NOT
CONSTITUTE AN OFFER TO SELL OR AN INVITATION TO PURCHA SE THE
SECURITIES DESCRIBED IN IT.